market direction

brettus said:
Buy cable on the open. Conservatives forming a coallition with liberal democrats should be extremely positive for the pound. Also should have a knock on effect with the FTSE futures.
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LOL no ones buying anything if there is a gap up open.

And if not, why not?

Mind you, check this out:

+++++++++++

May 9 (Bloomberg) -- European Union finance ministers meet today to hammer out the details of an emergency fund to prevent a sovereign debt crisis from shattering confidence in the 11- year-old euro.

“When the markets re-open Monday, we will have in place a mechanism to defend the euro,” French President Nicolas Sarkozy said. “If you don’t think that’s significant, you haven’t been to many EU summits.” Sarkozy cancelled a planned trip to Moscow today to deal with the crisis.

Europe will send “a very clear signal against those who want to speculate against the euro,” Merkel said.

Finance ministers will meet at about 3 p.m. in Brussels. A press briefing is scheduled for 6 p.m.

+++++++++++
 
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Just the rhetoric will keep it propped up for a while and buy them some time, but I don't know what they can do to stop it from declining otherwise. When fear and panic set in look out below.


Peter
 
i think another point is...appreicating euro is bad for pigs/greece, depreiciating euro is bad for germany... while its clear germany needs to sort out the trade surplus and what not, this isn't the way to do it as it will badly hamper relative prices for everyone else.

Currencies move to adjust for relative prices and in this diverse monetary union there is too much diversity to make currency an effective price mechanism...i.e someones always getting the wrong end of a ****ty stick. This problem though applies to rates as well, seems like navigating a minefield, blindfolded, on a unicycle with rick waller (renowned x factor fatty) on your back...difficult and unpleasant to say the least.

This "package" though seems extremely vague and volte face on bond purchases would be embarassing to say the least.
 
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i don't understand why euro would go down if ECB are intervening...i mean they have obviously been pretty indecisive but recently have been trying to play "hardball". I just cant see anyone wanting to sell to the ECB, esp if they don't know what size they are packing. It seems like they are just going to keep buying until it reaches their target, quote "whatever it takes" and them declining to say how much they wud put in, cos they have no clue how much this is gonna cost them. So why will it go down?

In the long term, this does appear to be a serious misjudgement. Sounds like they just want to take on speculators. Anyone have any ideas about what the euro banks will make of this?
 
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rawrschach said:
No central bank (that I know of) has ever successfully propped up a currency on a sustained basis. Devaluing is one thing, having to buy is a whole other story.
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How completely true. In the many years I've been trading I very rarely see differentiation between the two (totally different and opposing) types of intervention, it's daft.

With the euro, let's be honest, the German export machine is now going into overdrive with EUR/USD below 1.30. Greece is being sacrificed for the good of Germany.. and I'm sure the Germans would love to see it back to parity again.

The only thing I'm also fairly sure is that they wouldn't want this to happen too quickly.. I don't think any central banker likes excessive volatility. They might covertly buy it on the way down to slow it.

But a full scale collapse of EUR/USD? Not going to happen, UNLESS Germany gets sick of having to bail out Club Med and pulls out to return to the DM. Now, that would be interesting.
 
1) sure, but if the market really wants to go down it'll go down eventually no matter what the bank does. If there is a big enough reason to sell Euros at best the bank will do nothing but give people great prices until the point they stop buying.

2) pegging =| defending

3) they are different because a central bank has an unlimited power to issue/sell its own currency but limited power to buy. I'm not talking about the economic effect.
 
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Im not sure what you're arguing about. Sarkozy said that the EU is ready to defend the Euro against speculators, not that he would peg the currency.

Defending a currency involves buying it when it goes down, devaluing a currency involves seignorage when it goes up. CBs have liimited buying power and unlimited issuance power, i.e. in your terms, if the Euro is considered overvalued by the market the ECB has to buy, which it has limited power to do, which is why it will probably not work.
 
cr6196 said:
countries dont peg to defend, they peg for a few reasons, the core being to keep the value of the currency and to copy someones else monetary policy. This is all usually done so people will lend them money. And it is usually a long term thing, with most lasting a decade.
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Malaysia's pegging of the Ringgit to the Dollar which started about 1998 was a defensive move in my opinion. It got pegged after taking a hammering in the Asian Currency crisis and stayed at 3.8 to the dollar for 7 years.

China on the other hand... well - their 'semi-peg' is surely not in any way defensive.
 
trader_dante said:
Although it's somewhat amusing how emotional he gets, the most important part of the second video is the point he says "cancel all orders" which is more or less the exact low.

I've changed my mind on live trading rooms. They are invaluable.
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I tried a few trials of some live trading rooms - I find it too much of a distraction.

Anyone that's Skyped me when the markets open knows it can take 30 minutes to get a reply from me if I'm trading and that I'm chatty to the point of being annoying once I'm done.
 
rite i think i understand what ur saying, i was just saying that there were examples of misvalued currencies remaining that way and that there are examples of countries actually being able to defend a level that is too high. Although as pointed out, its pretty damaging. And so, although i agree that this is won't work, there are ways they could make it work...i.e change in interest rates, maybe exchange controls etc. etc.

All of these are obviously dangerous but politicans and the like are known to do wild things when backed into corners, and the attempt against speculators is probablly the start in a line of desperate actions.

sorry i forgot to add, that obviously its more confusing because its a currency union and the net surpluses and deficits will be pretty complicated, so in the example if the Euro got cheaper, Germany would have more surplus to defend the currency as a big exporter but what would happen to Greece?
 
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market round up, cba posting charts

corn - long
nat gas - long
live cattle - short
cotton - short
silver - short

ten year - out
s&p - out
copper - out

crude - taken the loss
euro - taken loss
gbp - taken loss

3 losing markets, but copper alone covers then and wont be trading FX with my strategy anymore.

will look for selling opportunity in the SP if i see a potential collapse, but wudnt advise others be in this market at all
 
yep - just watched that and wondered whether I should take a position now overnight. thought better of it. will just watch for a while.
 
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