Moderate Growth Ahead!
By Mike Conlon | June 24, 2010
Yesterday’s FOMC meeting came and went as expected, and Bernanke acknowledged that the pace of growth is going to be moderate going forward, backing off from last meeting’s stance that recovery was accelerating. Bernanke cited European debt conditions as being not supportive of growth, and of course he left interest rates unchanged as expected and kept the “extended period” language.
In addition to the FOMC news, US new home sales tanked and were off 33%, confirming the previous day’s data that the housing market is getting worse and not better.
Concerns over Greek debt are heating up as the cost to insure said debt is at an all-time high. Outside of general feelings about the global economy, I’m not certain what has changed in Greece to cause this rise.
What this adds up to is risk-aversion in the market, and Japanese yen and the Swiss Franc are benefiting.
Overnight, New Zealand released GDP that showed growth for a fourth straight quarter and matched analyst expectations. The Kiwi is lower, as the market may have been expecting a bigger number and had pushed the Kiwi too high, too fast.
So there’s no real earth-shattering news in the market today, but rather an overall feeling that economic conditions may be worsening and not getting better.
In the forex market:
Aussie (AUD): The Aussie is lower on risk aversion, but overnight a political coup took place where the Prime Minister Rudd stepped down after losing support of his colleagues. Julia Gillard became Australia’s first female Prime Minister as Rudd lost public opinion largely in part to the proposed mining tax he wanted to impose. Mining is a cash-cow for Australia, and this move was seen as anti-business.
Kiwi (NZD): The Kiwi is lower this morning despite the prospect of another rate hike in July as a result of seeing its fourth straight quarter of growth. The market was hoping the GDP figure would beat analyst expectations, but it “merely” came in as expected at .6%. The Kiwi was the biggest gainer yesterday, so this is a case of market anticipation falling flat. Nevertheless, this is still positive for the Kiwi.
Loonie (CAD): The Loonie is lower this morning as well, taking its cues from oil prices which have “retreated” to $76 and overall risk aversion in the market due to the notion that the pace of global economic recovery may be slowing.
Euro (EUR): Concerns over European debt are heating up as European stocks fall for the third day in a row. Perhaps the market is expecting the US to lead us to recovery, and yesterday’s FOMC statement made it pretty clear that may not be the case. I can’t see anything specific that would lead me to believe that anything today is different than last week. Then again, I don’t have insight into the inner-workings of European banks. The Swiss franc has been seeing massive inflows of capital as investors move out of the Euro, and it’s gotten to the point where it may be financially untenable for the SNB to try to intervene again.
Pound (GBP): The pound is higher against all but Yen, as the market “needs” somewhere to park its capital. This is a vote of confidence for the UK budget plans and BOE policy statement which show that the UK may be in the best position to tackle their debt and see growth at the same time. The Pound is back to 1.5 vs. USD.
Dollar (USD): Oh the dollar. It’s catching a bid from risk-aversion, but it’s clearly no beauty-prize winner either. Yesterday’s FOMC meeting and new home sales figures all but take a rate hike off the table for 2010. This morning, jobless claims are lower than the previous week, but still in ridiculously bad territory. Durable goods orders rose ex-transportation, but overall they shrank, though less than expected. Bottom line: the US economy is still weak. Until policies are instituted that will incent companies to create jobs, our slide into Japan-style stagflation is imminent.
Yen (JPY): The Yen is higher across the board on risk-aversion. Japanese stocks are lower as concerns over Europe may hurt Japanese exports, which have been driving economic recovery.
Unfortunately for the world, the US still rules the roost. We started the economic crisis, and now we’re pro-longing it. Yet bad behavior has been replaced by bad policy; and we are slowly sliding into the economic abyss as politicians compete for the next vote.
Meanwhile, banks have been bailed out, executives have paid themselves enormous bonuses, and they sit on the money and don’t lend for fear that regulatory and other economic factors will make it a losing proposition. Or they can’t lend, because they have too many toxic assets sitting on their books and are anticipating the next wave of deflation that will put more home-borrowers under water.
The “solution” to the housing crisis was the tax credit, and it’s just been reported that 14,000 unscrupulous folks bilked the government out of some $25 million, including 240 death row inmates. Government efficiency at its finest! What’s a few million anyway? We’re TRILLIONS in the hole already, and we’ll just keep spending.
Oh yeah, but at least we’re not the EU! Have treasury put that on the dollar bill!
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
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Possible Intervention?
By Mike Conlon | May 21, 2010
Talk is heating up around the globe that Central Bank interventions could be forthcoming in order to stabilize the currency markets. Currently, the Swiss National Bank (SNB) has been active in trying to maintain prices for the Franc vs. the Euro, and now the market is jittery that a meeting today of Euro zone finance ministers could produce a similar result. In addition, the BOJ has been known to intervene in its currency in the past, and there is speculation that Australia may be set to intervene as well.
This is effectively a form of market manipulation, but can be very profitable for investors who are on the right side of the trade. In this regard, should interventions occur, investors would want to be long the Euro and Aussie, and short the Yen and Swiss franc. Intervention is already occurring in Switzerland so this trade may be over, but what is important to know is which way policy makers want the currency in question to go.
In addition, German law-makers in the lower house have approved the Euro rescue package, as it is also in Germany’s self-interest to make sure that the Euro doesn’t collapse.
So what we’re seeing this morning is continued short-covering from yesterday afternoon and speculators starting to dip their toes back in cautiously to riskier assets. Traders do not want to be caught short over the weekend, especially if coordinated action is taken.
In the forex market:
Aussie (AUD): The Aussie is higher on short covering after aggressively declining for 5 days in a row. Speculation of possible intervention has led the market to cover their short trades, so don’t mistake today’s action for risk-taking, though early investors may be starting to test the waters to the long side.
Loonie (CAD): The Loonie is higher this morning as retail sales figures rose the fastest in nearly 5 years, and CPI figures came in slightly higher than expected, showing signs that economic growth is heating up in Canada. While a June rate hike is still expected for June, much of it will be predicated upon whether or not the Euro can stabilize and whether risk has been reduced in the market.
Kiwi (NZD): Consumer confidence rose 3.4% in NZ, showing signs of economic life in the country. In addition, income tax cuts are expected to encourage workers to stay home which will be positive for domestic economic growth. The Kiwi is higher on short-covering as well.
Euro (EUR): The Euro touched one-week highs in the overnight session, as German law-makers approved the Euro rescue plan. The looming threat of intervention has helped push it higher as traders don’t want to be trapped short over the weekend. In addition, German GDP figures came in as expected, showing a gain of .2% for Q1 after being flat the previous quarter.
Pound (GBP): The pound is also higher as it has been beaten up with the Euro over the last few sessions. Expect the Pound to trade somewhat sideways as investors weigh UK policy vs. the threat of continued Euro problems.
Dollar (USD): The Dollar is weaker this morning as short-covering is taking place. Expect the Dollar to continue to trade on risk themes, though note that today is not a risk-taking day as both commodities and US stock futures are lower so far this morning. Global austerity measures could affect US stock growth as demand wanes world-wide. Especially with blue-chip and technology companies that have large exposure to the EU. In addition, financial reform bills passed in Congress are adding fuel to the fire.
Yen (JPY): The Yen is trading lower on short-covering rallies as well, and overnight, the BOJ left rates unchanged at .1%. In what I would consider as something of an anomaly, the Yen is trading higher against the Dollar further illustrating that this is not a pure risk-taking day. While the Yen is still far away from levels that the BOJ would consider in order to intervene, they have been known to act in the past.
Because today is a Friday, the market is taking a respite as fear has ruled this week and the potential for central bank interventions have caused uncertainty. Right now we are at an inflection point; where markets could go one way or another and which way that will be is anyone’s guess.
So in the meantime, I advise taking cues from the market and take profits if you have them, and wait for next week’s action to initiate new trades. More than one trader has “blown up” by coming in Monday morning to a bit of nastiness in the form of central bank intervention. And while it is unlikely that this will happen, the threat is enough to cause caution.
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!
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A Good Friday?
By Mike Conlon | April 2, 2010
All eyes are on this morning’s Non-Farm Payrolls report which is due out at 8:30AM EST. Stockholders anxiously await this figure as their market is closed today so those that didn’t hedge against potential downside risk may be a bit nervous going into this number and subsequently this weekend.
The NFP report is expected to show a gain of 184K jobs; however I read somewhere that some 70K of those jobs were due to hiring by the government for the census, which by all accounts is temporary. So there is a lot of uncertainty about what the market needs to see to form the opinion that the UD economy is recovering. Regardless, of what the number is, expect mucho volatility surrounding it.
In other news, the Swiss Franc made headlines yesterday as a major amount of selling hit the market near the close in Europe. While not confirmed by the Swiss National Bank (SNB), speculation is that the government intervened in the currency to weaken it and keep it from appreciating to further record highs. I don’t talk about the Franc much here, but the Swiss have been known to do this in the past as recent Euro weakness has caused Franc strength. The sell-off was good for roughly 350 pips vs. the Euro, a tidy profit if one were on the right side of the trade.
So this morning we are seeing dollar strength, and without the other markets trading to provide correlations and historical trends, the forex market is on its own today. So expect trading to be dominated by risk themes and little else today.
In the forex market:
Aussie (AUD): The Aussie is slightly lower as the market as traders pare back positions heading into NFP. The AUD/USD will be extremely volatile as it best represents the risk on, risk off trade.
Kiwi (NZD): The same deal for the Kiwi as the Aussie, though slightly more at risk as the Kiwi attempts to shake off the IMF’s claim form yesterday that it is over-valued by 10-25%.
Loonie (CAD): Will today be the day that the Loonie reaches parity with the US dollar? It came within 65 pips of doing so yesterday, and is currently sitting just over a penny away.
Euro (EUR): The Euro is just hanging in there above 1.35 vs. USD and is benefiting from the “no news is good news” mantra today.
Pound (GBP): The Pound has been on a tear as of late as exports have improved causing stocks to move higher. In addition, advance polls show that the Conservatives are leading right now, giving a glimmer of hope that fiscal responsibility may return to the UK.
Dollar (USD): I’ve already mentioned the Dollar above and the expectations, but my feeling is that initially we are going to see dollar strength, followed by dollar weakness brought on by a better than expected number. While I don’t like to guess at these things and I’m not trading this event, I must admit I’m totally confounded by this report. So I’m just gonna sit on my hands and watch the action from the sidelines.
Yen (JPY): The Yen has been weakening as appetite for risk and yield-seeking has been ferocious. This suits the Japanese just fine as a weak yen is good for exports.
So unless you have nerves of steel, I suggest you grab a bag of popcorn and sit back and watch this event unfold. (I realize its 8:30 AM and no one eats popcorn then, but I do have a European following and as they say with regard to other pastimes, “it’s always noon somewhere!”
I’m going to try to do the video live for the release of the number and am hoping that the increased craziness surrounding it doesn’t invoke technical difficulties.
Happy Good Friday and Easter weekend to those that celebrate it!
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Topics: What To Look At In The Market | 1 Comment »
RBA Leaves Rates Unchanged!
By Mike Conlon | February 2, 2010
So this morning is a risk-aversion day in the currency markets, however equity futures in the US are up slightly this morning, as are gold and oil. At some point today, I expect some sort of mean reversion.
Here’s a look at the currencies:
Aussie (AUD): As mentioned, the Aussie is down this morning as the RBA left rates unchanged. There was also a comment made about sovereign debt concerns that is also weighing on the Aussie. It’s currently the biggest loser on the morning, down 1% vs. the US dollar and 1.3% vs. the Japanese yen.
Kiwi (NZD): The Kiwi is down this morning trading in sympathy with the Aussie, and there was also news that wages in New Zealand rose at their slowest pace in 9 years. This demonstrates that the labor market is weak and is a sign that rate hikes may be off the table for some time.
Loonie (CAD): The Loonie is down this morning as a result of risk-aversion, though it has been trading higher recently as oil prices have been moving higher. There’s no real market making news on the Loonie until the end of this week when they report the unemployment change on Friday, so look to oil prices to give clues about where the Loonie may go.
Euro (EUR): The Euro is up slightly this morning as it’s taking a much needed break from the pounding it’s been taking. By now you are familiar with all of the negative news from the region regarding the PIIGS countries, so today, no news is good news. The trend though is still clearly down.
Pound (GBP): The pound is lower this morning as market sentiment over the health of the UK economy is still negative. The pound tested 1.59 vs. the US dollar and is near a three-month low.
Dollar (USD): US home sales figures come out at 10AM EST and could serve as a barometer to the health of the economic recovery in the US. Coming on the heels of the biggest federal budget EVER proposed, there are increased worries that the administration’s plans, “just don’t add up” and that proposed tax hikes on businesses and the wealthy will further stall jobs growth.
Yen (JPY): The yen is higher this morning as the global risk-aversion theme is taking place. This may leave the BOJ in a conundrum as their attempts to weaken the yen to improve exports could be undermined by global risk aversion themes. Stay tuned on this one.
Overnight, Asian equity markets were up and European markets are up as well, though off their highs of the day. US stock futures are slightly higher, though I suspect that this existing home sales data at 10 may be the catalyst for a stock market reversal if they come in worse than expected.
Currently, oil is up almost a full percent to over 75, and gold is trading just higher than 1100 to 1113.
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
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Global Recovery Under Way?
By Mike Conlon | February 1, 2010
All eyes are on the US ISM Manufacturing number due out this morning at 10AM EST. The market is hoping to see a rise in this number as that would indicate business activity is picking up. So far this morning, we are seeing mild risk-taking as the Euro has rebounded from 4 days of selling.
US stock market futures are up as are gold and oil.
Let’s examine how this is affecting world currencies:
Aussie (AUD): The Aussie is currently trading down this morning despite the risk-taking tone this morning as traders are gearing up for the RBA rate decision due out overnight. The market is expecting a 25 basis point hike to 4%, but this could trigger a bearish scenario. If they do raise rates, it is extremely likely that they will take another rate hike off of the table going forward. There is also a chance that they don’t raise rates this time, as news that China is paring back economic stimulus could affect the Australian economy.
Kiwi (NZD): The Kiwi is up slightly this morning benefitting from the risk trade.
Loonie (CAD): The Loonie is up this morning as oil prices recover and stabilize as well as a general risk-taking mood this morning. The market is waiting for confirmation from the ISM data so it trading in a tight range until that release. The Loonie should strengthen today if the number comes in better than expected.
Euro (EUR): The Euro is the biggest gainer this morning as it rebounds from 4 days of weakening. The market is gaining confidence that the plan to manage the debt crisis in Greece is acceptable and plausible which generally ties in to the risk-taking trade this morning. Over the last four days, the thought that Euro could serve as an alternative to the US dollar as a reserve currency was largely debunked as Central banks pulled cash out of the Euro at a record pace.
Pound (GBP): The pound is down this morning against all but the Japanese yen as housing prices slid in the UK and banks granted fewer mortgage applications last month. The Bank of England rate decision is on tap next week but traders are more interested to see if they continue with their quantitative easing program.
Dollar (USD): The US dollar is down this morning as part of the risk-taking trade. Stock market futures are up as are commodities and all eyes are on the ISM Manufacturing number. There are some figures out this morning that show that US personal incomes are up slightly, and personal spending is higher than the prior reading but missing expectations by just .1%.
Yen (JPY): The yen is down across the board this morning as the BOJ’s top economist said that Japan’s economy is far from “achieving self-sustaining growth” as their export led recovery failed to induce consumer spending. This also falls in line with ministers calls last week for a weaker yen.
As we can see the big news of the day is ISM Manufacturing number which will be viewed as a proxy for global economic recovery. The only currency that is trading “out of the ordinary” is the Aussie, as the market prepares for the rate decision.
In global markets, stocks in Asia closed generally higher and Europe is higher at the moment. US stock markets futures are higher pre-open and oil is up to 73.47, with gold slightly higher to 1088.
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Fastest Growth since 2003!
By Mike Conlon | January 29, 2010
This morning, the US Q4 GDP figures came in at a better than expected 5.7%, the fastest growth since 2003. While this is seemingly good news for the US economy as it marks the 2nd straight quarter of growth providing further evidence that we moved forward from recession.
However, we’re not out of the woods just yet. There are still global concerns weighing heavily upon the markets, such as the Greek debt problem in the Euro Zone, as well as China’s restrictions on lending.
This morning’s currency action is rather neutral, as it can’t be described as either risk-taking or risk-aversion.
Here’s how world currencies are trading this morning:
Aussie (AUD): Gains in the Aussie have slowed down as the global slowdown, particularly in China, is expected to slow growth in Australia. This morning is a mixed bag for the Aussie, as it’s higher vs. the Japanese yen and British pound, but down vs. the US dollar and Euro.
Kiwi (NZD): The Kiwi is trading higher across the board and is showing the highest percent gain vs. the yen this morning, up 1%. They just reported a budget deficit for the first time in 9 years, as tax receipts have slowed and government spending picked up last year.
Loonie (CAD): Canadian GDP came in this morning at .4%, a smidge higher than expectations. Canada is showing slow but steady growth, which is a positive for the economy. The Loonie has been weakening against the US dollar as global risk appetite has abated and oil prices are down almost $6 this year.
Euro (EUR): The Euro is trading higher against the yen and the pound, but down against the rest this morning. Consumer prices rose 1% showing that inflation is starting to pick up in the region. Also to note is that fears over the Greek debt crisis are weakening as region considers all of its options.
Pound (GBP): The pound is down this morning against all but the yen, experiencing a technical pull back from its recent strength. Housing prices were up the most in 5 months and consumer confidence is improving. BOE policy-maker Andrew Sentance cautioned that the recovery can continue, “especially if interest rates remain low.”
Dollar (USD): The dollar is showing strength today after the GDP figures that were reported this morning. The fastest growth since 2003 is stoking thoughts that inflation may be closer than the Fed thinks.
Yen (JPY): The Japanese yen is down across the board today as the CPI index showed that deflation is still very prevalent in the Japanese economy. Finance Minister Kan called for the Bank of Japan to take a powerful approach to combat falling prices and a strengthen yen.
The stock markets closed down in Asia, but are currently higher in Europe and the US. Gold is down slightly and oil is up this morning.
So today is a bit of a mixed bag. Keep an eye on the correlations to watch for break-downs or irregularities to see if there are reversals or reversion to mean. Today seems like it will be a range-bound day going into the weekend.
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!
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Its All About Jobs!
By Mike Conlon | January 28, 2010
This morning, it looks like risk appetite has returned to the forex market after yesterday’s FOMC meeting has been fully digested. The only thing “unexpected” from the meeting was that the decision was not unanimous, as KC Fed Chief Thomas Hoenig dissented and raised concerns about possible inflation. While this view will most probably be discounted for “an extended period” to use Fed parlance, it is interesting to see someone break from the pack.
Also, additional problems from the Euro zone have increased downward pressure on the common currency, as Portugal has now joined the mix and is showing up on the watch lists as their fiscal budget is drawing attention from the ratings agencies. In light of these problems, the market is still in a risk-taking mood.
The other big news came from last night’s Presidential State of the Union Address, where the President issued a renewed commitment to fixing the employment problem here in the US and pledging to help put Americans back to work which overall is positive for economic growth. Whether or not the follow through occurs is another story, but for now, the markets are satisfied.
Here’s a look at the currencies:
Aussie (AUD): Benefitting in early trade from risk appetite, the Aussie traded as high as 90.45 vs. the US dollar. In addition, commodity prices are higher as well. There is much debate over whether or not another rate hike will be in order at the next policy meeting as inflation concerns abound. Watch out for a mid-morning reversal if equity markets sell-off.
Kiwi (NZD): Yesterday, the New Zealand Central Bank left interest rates unchanged at 2.5% as inflation is likely to stay in its target range. However, the bank is expected to move on rates sometime before mid-year. Also up this morning, but off of its highs.
Loonie (CAD): With oil prices holding above $74 (for now), the Loonie is showing decent gains this morning against the risk averse currencies. The Loonie is showing some strength today vs. the US dollar, as it bounced back against technical resistance at 1.065.
Euro (EUR): The Euro is down this morning after having broken support at 1.40 vs. the US dollar. While EC economic sentiment was up this morning vs. an expected decline, the news that the first of the PIIGS countries, Portugal, may be following Greece’s lead down the road to fiscal uncertainty. S&P is saying that Portugal’s current budget leaves the country economically “frail”. Remember that when trading often times support becomes resistance so keep that 1.40 level in mind.
Pound (GBP): The Pound is strong again this morning, extending yesterday’s gains. The prevailing thought is that interest rate hikes may be on the table for the foreseeable future.
US Dollar (USD): The dollar is down today against the commodity currencies as risk appetite has returned. US durable goods orders came in lower than expected, and initial jobless claims came in slightly more than expected. This lends credence to the FOMC stance that rates should remain low for “an extended period”, much to KC Fed Chief Hoenig’s chagrin.
Yen (JPY): The yen is down against all but the Euro currencies, as the bottom rung on the risk-taking ladder. The uptick in risk appetite as a result of the State of the Union Address last night has helped propel Asian stock markets higher last night and the yen lower.
In world markets, the Asian stock markets closed higher than 1.5% from the previous day but stocks in Europe are mostly lower with news out of the Euro Zone. US stock markets are down, and gold and oil are higher, to 1093 and 74.12 respectively.
What’s important to take away from all of this news is that no single instrument trades in a “bubble” and that news from around the globe can affect any market. By having and maintaining an understanding of global events, investors and traders can better position themselves.
To learn more about how these markets are ALL inter-related, be sure to check out our extremely affordable currency trading courses!
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FOMC Day Fun!
By Mike Conlon | January 27, 2010
This morning, the broader currency markets are trading in a slight range, with the Japanese yen (JPY) and the British pound (GBP) showing gains against the US dollar. There is a mild risk-aversion theme this morning as all eyes are on the US FOMC policy meeting today at 2:15 EST.
As far as news-worthy currency events go, this may be the one which has the largest impact on the market. It is almost 100% certain that the Fed will not be raising rates from .25%, however the market will be looking for clues for any change in language that may suggest a shift in policy.
The markets here in the US have been on edge recently, as political pressure and rhetoric have picked up because of what many see as a rejection of the current administration’s policies. This has caused some in Congress to pull their support for Fed Chairman Bernanke, whose term is up at the end of January.
Let’s take a look at how specific currencies are faring so far:
Aussie (AUD): Earlier today the Australian Consumer Price Index (CPI) number came in at .5% for Q4 and at 2.1% YoY, which was slightly higher than expectations. This sent the Aussie initially higher and above .90 against the US dollar, though it’s now trading below on the move to risk aversion and fears that the moratorium in Chinese lending may affect the Australian economy.
Kiwi (NZD): The Kiwi is trading down on the risk aversion theme, most notably against the Japanese yen around .5% on the morning. The Reserve Bank of New Zealand is coming out with its rate decision later today and is expected to maintain rates at 2.5%, which is a record low. This could weigh heavily on the Kiwi as the market has priced in a 50 basis point rise by mid-year.
Loonie (CAD): The Loonie is trading near a 5-week low as world markets and commodities have sold off recently and the flight to safety trade has been in effect. One of the major factors affecting the Loonie is the price of oil, which is off some $10 from recent highs.
Euro (EUR): The Euro is off slightly this morning, as it attempts to shake off the problems it’s been having related to the debt crisis in Greece. European stock indices are down today, as comments from ECB council member Weber said that the bank may take additional steps to withdraw liquidity from its banking system. With today’s FOMC decision on tap, the Euro could test 1.40 which has been an area of psychological support for some time.
Pound (GBP): Reports are out this morning that the quantitative easing measures that the Bank of England has taken may be working. Although UK GDP came in lighter than expected, it did come in positive which is a step in the right direction. BOE policy-maker Sentance warned that the bank may need to act quickly if the recovery strengthens and inflation picks up. The pound is up to 1.62 vs. the US dollar.
US Dollar (USD): The dollar is weak against the pound and the yen this morning, but otherwise is up slightly against the commodity currencies and the Euro. The market is waiting on the FOMC decision and more importantly if there is a change is language which may give hints about a change in policy. Keep an ear out for a continuation of the “extended period” language. The dollar has been gaining recently, as risk-aversion has heightened around the globe.
Yen (JPY): The Japanese yen is at a 5-week high vs. the dollar, as the Japanese yen benefits the most from the risk-aversion trade. With interest rates at .1% and not moving any time soon, the carry trade is back on with the yen as the funding currency of choice. Also to note is that Japanese exports have risen for the first time since mid-2008, a sign that economic recovery may be taking place.
In world markets, stocks are down in Asia and Europe and the MSCI world stock index is experiencing its largest losing streak in almost a year as concerns that developed economies may be preparing to scale back which affects emerging markets. In the US, the stock markets are down slightly as are gold and oil, which are trading below 1100 and 75 respectively.
Look for a reversal today if the Fed does as expected and maintains uniformity of language with its previous rate decisions. The world markets are looking for some vote of confidence that will allow risk-taking to resume again. Despite all of the political wrangling coming out of Washington, if Bernanke can project confidence that the recovery in the US in taking place, then it may signal game on again!
To learn more about how these events affect the currency markets, be sure to check out our currency trading courses!
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Tags: account, AUD, Aussie, Australia, bank, Bernanke, British, cad, carry trade, commodities, commodity, course, currenc, currencies, currency, currency market, currency trading, data, decision, dollar, dow, economic, economy, EUR, Euro, Europe, fed, free, fx, fxedu, gbp, gold, Il, index, interest, interest rate, interest rates, Japan, jpy, Kiwi, market, Mike Conlon, new zealand, news, nzd, oil, pair, pound, practice, practice account, rate decision, ssi, stock, stocks, Swiss, time, trade, USD, Yen
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End of the Year Blowout Sale!
By Mike Conlon | December 28, 2009
END OF THE YEAR BLOWOUT SALE! OVER 55% OFF!
As we come to the end of 2009, now is the time to look back and reflect upon this past year and to think about making changes going forward. 2009 was a “roller coaster” of a year for investors and many were left wondering what to do when the markets were collapsing and then missed the rally back.
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Tags: account, charts, comments, course, currenc, currencies, currency, currency market, currency trading, data, dow, financial, fx, fxedu, Il, instructor, invest, pair, pairs, rate, spot, Swiss, time, trade, trend, volume
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No Change at BOJ!
By Mike Conlon | December 18, 2009
The Japanese Central voted to keep their interest rate at .1%, attempting to encourage economic recovery. Japan has been battling deflation for MANY years, but it has picked up recently as the most recent CPI (consumer price index) declined 2.2% in October, marking the eighth straight month of declines.
The also issued a statement that they do not “tolerate” deflation, but issued no plans as to what they actually intend to do about it. Mostly hollow words if you ask me.
So this morning we’re seeing some Yen (JPY) weakness, as its down across the board, most notable against the Canadian dollar (CAD) at -1.07%. CAD is strong due to a rebound in oil prices which is trading above 74.
Also, I’m seeing a bit of British pound (GBP) strength this AM as UK mortgage approvals rose. This means the banks are starting to lend more and hopefully that will help stabilize their housing market.
Euro is a mixed bag this AM, trading flat against USD so far. News out of Greece is that they are going to reform their notoriously lax tax policy to try to raise revenue to get their debt under control. In Germany, Business confidence reached its highest levels since July 2008.
The Swiss franc (CHF) has advanced past 1.50 Euro, as the Swiss National Bank (SNB) allowed the currency to appreciate. Back in March, the bank intervened in its currency to keep it from appreciating and undermining economic recovery.
Lastly, today is “quadruple witching“– where both futures and options positions expire. So this could lead to some volatility today… though I suspect it won’t be bad as traders have been paring back positions for the holidays and year end.
Tags: bank, cad, CHF, currenc, currency, dollar, dow, economic, EUR, Euro, franc, gbp, Il, index, interest, interest rate, invest, Japan, jpy, market, Mike Conlon, news, oil, pound, Swiss, trade, trader, trading, USD, Yen
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