Eurozone Fiscal Problems
27/03/10 23:23
Only 6 Seats Remain for Chris Lori's
Workshop!
In Chris Lori's Forex Pro Traders Club and other commentary we discuss interest rate differentials as a primary FX driver. This concept is covered in detail in a video series called "Inside the Banks." Yield differentials are a core part of our long term strategy trading model.
We look at how yield differentials have moved for EURUSD and USDJPY as part of a broader look at the recent rally in Treasury yields.
In the current environment, we would advise some caution in determining that yield spreads will become a material driver of the FX markets. First, it is unlikely that volatility will remain subdued in light of the Greece crisis and normalisation risks. Bond vigilantes may be ready to come out in droves, but central banks will call their bluff in the current growth environment, leading to significant instability in yields. As such we would position for a general rise in FX volatility. As for yields, we will maintain focus on AUD, NZD and the coordinated positioning of BoC and the FED. The FED first needs to bring the bank rate higher before tightening the OCR.
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In Chris Lori's Forex Pro Traders Club and other commentary we discuss interest rate differentials as a primary FX driver. This concept is covered in detail in a video series called "Inside the Banks." Yield differentials are a core part of our long term strategy trading model.
We look at how yield differentials have moved for EURUSD and USDJPY as part of a broader look at the recent rally in Treasury yields.
In the current environment, we would advise some caution in determining that yield spreads will become a material driver of the FX markets. First, it is unlikely that volatility will remain subdued in light of the Greece crisis and normalisation risks. Bond vigilantes may be ready to come out in droves, but central banks will call their bluff in the current growth environment, leading to significant instability in yields. As such we would position for a general rise in FX volatility. As for yields, we will maintain focus on AUD, NZD and the coordinated positioning of BoC and the FED. The FED first needs to bring the bank rate higher before tightening the OCR.
Read More...
So, how close are we to intervention?
21/10/09 20:30
It was a pleasure to be involved in the CompassFX
Traders Summit last week. I had just returned from a
trip to Asia the day before, but managed to get
organized to speak at the event. I enjoy dedicating
time to training in this business, but it is
sometimes frustrating. I believe that my
qualifications and extensive institutional experience
in this business can be of tremendous value to those
willing to take on this business with the respect and
the attention it warrants. With respect to persons
new in this business, we call "developing traders,"
we see common patterns. We call it the "Just tell me
where to get in" syndrome. Developing traders run
around aimlessly looking for the magic formula, the
holy grail, the golden goose, the thing that is going
to do the thinking for them so they don't have to
think for themselves. Folks, to succeed over the long
term in this business, it goes much much deeper than
that and requires much more.
To know what is really required to succeed, you can start by viewing my latest webinar on Psychology and Risk and work from there.
Forex Notes
The Eurogroup meeting 'on the euro' Monday yielded very little of substance, but comments outside the forum suggest concern is mounting. As the November G20 approaches, Eurogroup finance ministers are expected to voice their displeasure at current FX levels, and the Eurozone's key policymakers are heading to Asia by year-end to press their case. So, how close are we to intervention? Looking back at the developments which unfolded just prior to the ECB's last foray in markets in 2000, we are probably some distance from that step. Read More...
To know what is really required to succeed, you can start by viewing my latest webinar on Psychology and Risk and work from there.
Forex Notes
The Eurogroup meeting 'on the euro' Monday yielded very little of substance, but comments outside the forum suggest concern is mounting. As the November G20 approaches, Eurogroup finance ministers are expected to voice their displeasure at current FX levels, and the Eurozone's key policymakers are heading to Asia by year-end to press their case. So, how close are we to intervention? Looking back at the developments which unfolded just prior to the ECB's last foray in markets in 2000, we are probably some distance from that step. Read More...
G20 and ECB Statement are Market Focus
01/04/09 20:21
Chris Lori Professional
Traders Workshops
Charlotte, NC May 1-3
Auckland, NZ Aug 7-9
See Workshop Page for Details
Source: UBS
A press report suggesting the Obama administration considers a pre-packaged bankruptcy for a major US carmaker as the best solution going forward weighed on stock futures overnight. European bourses were also weaker on the news. Although President Obama this week had given a major carmaker 60 days to get its house in order, the "quick and surgical" bankruptcy his administration described as an option is reportedly becoming "inevitable". The report, however, was subsequently denied by an official of the Obama administration. He said that the President's thinking on the automaker's situation has not changed. As such the avoidance of a bankruptcy would still remain the most favored outcome. At Pro Traders Club, we do not find this news at all shocking, since we anticipated that GM would continue to fail on their 3 month window for salvation.
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Charlotte, NC May 1-3
Auckland, NZ Aug 7-9
See Workshop Page for Details
Source: UBS
A press report suggesting the Obama administration considers a pre-packaged bankruptcy for a major US carmaker as the best solution going forward weighed on stock futures overnight. European bourses were also weaker on the news. Although President Obama this week had given a major carmaker 60 days to get its house in order, the "quick and surgical" bankruptcy his administration described as an option is reportedly becoming "inevitable". The report, however, was subsequently denied by an official of the Obama administration. He said that the President's thinking on the automaker's situation has not changed. As such the avoidance of a bankruptcy would still remain the most favored outcome. At Pro Traders Club, we do not find this news at all shocking, since we anticipated that GM would continue to fail on their 3 month window for salvation.
Read More...
ECB Dovish and Lower Equities Does Not Help EUR
10/02/09 23:49
The markets were disappointed by the lack of clear
details in the Treasury's bank bailout package, now
named "The Financial Stability Plan". The S&P500
closed lower by 4.9%, which in the FX world,
corresponded to the USDJPY falling from around 91.20
levels to settle between 90.20 and 90.40, while
EURUSD also traded lower from above 1.3050 and
finishing the session around 1.2980. In bond markets,
2-year Treasury yields fell by 12bp to 0.9%, while
10-year yields fell by 17bp to 2.82%.
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EUR likely to fall as rate cuts become apparent
08/01/09 15:49
Ref:UBS
Investors looking for an extensive early year rally were brought down to earth yesterday as signs of a deepening recession became apparent and investors pared risk positions. . Early-year rallies in risk, especially during recession years as markets attempt to price in an early recovery, are often hazardous and a swift realisation of circumstances is consistent with the view that the market will remain structurally risk-averse in the coming quarters. This risk aversion will fuel USD and JPY strength.
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Investors looking for an extensive early year rally were brought down to earth yesterday as signs of a deepening recession became apparent and investors pared risk positions. . Early-year rallies in risk, especially during recession years as markets attempt to price in an early recovery, are often hazardous and a swift realisation of circumstances is consistent with the view that the market will remain structurally risk-averse in the coming quarters. This risk aversion will fuel USD and JPY strength.
Read More...
USD can't find reason to rally amid the negative sentiment and data
02/07/08 23:43
Naturally, the USD can't find reason to rally amid
the negative sentiment and data. ADP employment
reported showed -79k contraction in the private job
markets, much worse than expectation of -20k.
Read
More...