Dollar remains steadily in range in early US session after data shows stronger than expected inflation reading in March. CPI rose to 2.7% yoy versus expectation of 2.6% yoy, highest reading since December 2009 and a sharp jump from February's 2.1% yoy. Empire stat manufacturing index beat expectation and rose to 21.7 in March. TIC capital flow dropped to 26.9B in February. Industrial production rose 0.8% in March, better than consensus of 0.6%.
Recent Forex News and Forecast
Friday, 15 April 2011
Action Insight Mid-Day Report 4-15-11
Action Insight Daily Report 4-15-11
Markets sentiments is hit mildly earlier today after strong Chinese inflation data triggered concern of further tightening from China. Asian equities are generally lower but losses are limited so far. Yen strengthens mildly together with falling stocks and recent decline in yen crosses might continue as the day goes. Dollar also recovers mildly but strength is muted. The greenback would continue to face pressure from surging commodity prices with gold making another record high at 1480 and silver extends up trend through 42 level. Euro and swissy are both resilient and would likely remain strong against the greenback even though Moody's just downgraded Ireland's rating by two notches to Baa3 from Baa1 and issued a negative outlook.
Thursday, 14 April 2011
Action Insight Mid-Day Report 4-14-11
Dollar dips versus the Japanese yen in early US session after data showed initial jobless claims unexpectedly rose to 412k in the week ended April 9. That's the highest number in two months and much worse than market expectation of 380k. COntinuing claims, though, dropped by 58k to 3.68m in the week ended April 2, the lowest number since September 2008. Headline PPI missed expectation and rose 0.7% mom, 5.8% yoy in March only while core PPI rose 0.3% mom, 1.9% yoy. USD/JPY extends recent pull back from 85.51 an breaches 83 level after the release while the Japanese yen also strengthen mildly. USD/CHF made new record low earlier today and remains soft for deeper decline.
Action Insight Daily Report 4-14-11
Dollar index's recovery was rather brief and dips to 74.66 in Asian session today to extend recent decline. Recovery in commodities, in particular in precious metals, is a main driving force in the current decline in the greenback. Silver takes the lead and recovers to above 41 level and is set to test recent high again. Meanwhile gold follows and is staying firm above 1460. USD/CHF makes new record low at 0.8895 on broad based strength in swissy. The greenback manages to stay above recent low of 1.4519 but is vulnerable to deeper fall should crude oil could extend yesterday's recovery.
Wednesday, 6 April 2011
Action Insight Daily Report 4-6-11
Yen and dollar resume weakness today and are both broadly lower against European majors. Yen extended the post intervention decline as partly driven by revival of carry trades. In addition, BoJ is said to be considering a credit program to spur lending for reviving the economy after March's natural disaster. The bank may make an announcement as early as tomorrow after a two day meeting. Dollar, on the other hand is pressured as Fed minutes showed diverging opinion among members on whether to unwind the stimulus measures this year. Gold jumped to record high of 1458.6 overnight while crude oil is firm above 108, both keeping the pressure on the greenback.
Tuesday, 5 April 2011
Action Insight Mid-Day Report 4-5-11
Moody's downgraded Portuguese debt rating for a second time in less than a month day, by one notch from A3 to Baa1. The rating agency also placed the country on review for another downgrade. Yield on portugal's 10 year bond jumps after the news to above 8.75%. CDS also rose above 590 basis points and is above Ireland's level for the first time since August 2010. Portugal's situation has deteriorated after the government failed to seek approval of the budget. Prime Minister Jose Socrates resigned and election for the new government will take place on June 5. Moody's expects the elected government will tap the European Financial Stability Facility (EFSF) with 'urgency'.
Action Insight Daily Report 4-5-11
Monday, 4 April 2011
Action Insight Mid-Day Report 4-4-11
Click here
http://campaign.r20.constantcontact.com/render?llr=5ymfsnbab&v=001cNWX07JYSkRHdig2fYtcTsiEvDxinLAmQTKhzK30WiFR_pdWilL4ncsgKa69TrwRmFbb8O4_TIeFv_nBqLMTMbzZUoV5tB42_XGSpu25L-tmTxDIObVJcw%3D%3D
Mid-Day Report: Markets Tread Water, Aussie Pares Gain ahead of RBA
Market actions are rather subdued today as traders are awaiting key event risks later this week. Euro remains firmly supported by expectation of rate hike from ECB on Thursday but there isn't any fresh stimulus for further rally. EUR/USD is still struggling around 1.425 level despite edging higher to 1.4267 earlier today. Data from Eurozone saw sentix investor confidence dropped sharply from 17.1 to 14.2 in April. Eurozone PPI rose 0.8% mom, 6.6% yoy in February. Other data released today saw UK PMI construction dropped just slightly to 56.4 in March. Japan monetary base rose 16.9% yoy in March.
Forward this report to a friend!
http://ui.constantcontact.com/sa/fwtf.jsp?llr=5ymfsnbab&m=1101040628510&ea=drerhys.forex%40blogger.com&a=1105054499832
This email was sent to drerhys.forex@blogger.com by contact@actionforex.com.
Update Profile/Email Address
http://visitor.constantcontact.com/do?p=oo&m=001-JOCTjwxzZ0SP2JB785e0g%3D%3D&se=00144d4-sd9Hyg%3D&t=001R1EO9EBV5iQ_pIqlcqsRyQ%3D%3D&l=001FCSs65SMrsI%3D&r=001y5KaVlBn7_Y%3D&llr=5ymfsnbab
Instant removal with SafeUnsubscribe(TM)
http://visitor.constantcontact.com/do?p=un&m=001-JOCTjwxzZ0SP2JB785e0g%3D%3D&se=00144d4-sd9Hyg%3D&t=001R1EO9EBV5iQ_pIqlcqsRyQ%3D%3D&l=001FCSs65SMrsI%3D&r=001y5KaVlBn7_Y%3D&llr=5ymfsnbab
Privacy Policy:
http://ui.constantcontact.com/roving/CCPrivacyPolicy.jsp
Online Marketing by
Constant Contact(R)
http://www.constantcontact.com/home.jsp?pn=axelerant&cc=custom01
Action Forex Company Limited | Room 1707, 17/F | Treasure Center | 42 Hung To Road | Kwun Tong | Kowloon | 852 | Hong Kong
Usd Dominated By Business Cycles
Click here
http://campaign.r20.constantcontact.com/render?llr=d7egsfcab&v=001cNWX07JYSkTlmFZp3cR3YNFmJScOJq1KK10t37haNYw8Mcq_8FduUD3j9-EHgTib9pe-JA2LnW6GpJ-1qG1y56fJLS9T56B63UbiYjvj4wU6uWJ0oCH-CT16dG_Bz0h9LVV3Z0pFrns%3D
TheLFB Daily Client Note
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Client Note: U.S. Session Preview
April 04, 2011
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Quick Links
Latest Charting Video [http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1105053840617&s=4796&e=001hQTBWrmXFJnCvpPnRRyuWg1RjsWchUNosQX_L3rinYlcVnpGiUqQyXERWljTmK79tFzskUBv06GuDAmz79gzxHo1KE1kyoUwclB4LVwX18g7IMKmwTxYyxEnS0JvU9OvLrEAUmnmPUvUYSUqgU1pIw==]
Newsletter Archive [http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1105053840617&s=4796&e=001hQTBWrmXFJn3Kyak-fqkhgK351zKSlRo5s16F0uARHNQ4s1Bsgb-5jZtZrvhNnVi6Rhl6vvxH7gXT-h0OsEYhwQUWNhzNPjd3BQAdgbQVQaDkyGumfsB8ZXLJvGqZBhiHD-fzfETh4sS9mk4cfpm5A==]
Follow us on Twitter [http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1105053840617&s=4796&e=001hQTBWrmXFJm_i3Wi2csGLoFyadjeSRX_UwOP6xohOch57zfP3wwT0_UzejDdTTfa0BdmydvcrbFsVlnqkHCZtEuA0aWCM_QGYR7lvbdaifYJTGcUMouDMQ==]
Contact Us [http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1105053840617&s=4796&e=001hQTBWrmXFJlCLdNcX1h_PuKKLlbZIBxHZac179N1wILi6rNmj7wNBgHyL-eEk_Jmc75W5NbB_TAjxQmUSJdQ_s1XUr8XmrXV5sCma9iVZlP3fY1hwI1yDAxwVF527e3szHxs3aLNeUNBleRA2GdgJtLW9_aw7aoR]
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Dear Trader,
Welcome to TheLFB's daily client note. Follow along with the trade team as they
review global markets, headlines, trade divergence, momentum, and currency impact
over the 24 hour trading session. Please use the links opposite to access recent
articles and videos, and to register for trade desk updates.
Sincerely,
TheLFB Trade Team
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Trade Desk Note
Usd Dominated By Business Cycles
Peak, contraction, trough, expansion, growth, are the five cycles of the global
economic business cycle. Each phase of the cycle reflects the currency valuation
for each economic region. The cycles run over an average ten to fifteen year period.
The next move in the U.S. phase will likely be from the trough into expansion, which
will be lead by economics, sentiment, or a mixture of both. A double-dip move back
into the contraction phase is historically unlikely, but could happen if the U.S.
housing and employment outlook worsen as the summer approaches. The reasons why
or how it all happens can be debated forever.
The phases of contraction and trough have already happened globally, and there
is now an upward target of sustainable expansion that may lead to growth over the
coming quarters. Growth will come, it always does, but the relative strength of
the U.S. cycle compared to other regions may not be as robust.
The U.S. is following the business cycle phases the same way other regions are,
but the difference is that the U.S. is going from boom to bust a lot quicker than
other regions. The cycles are getting shallower, and are coming in shorter five
to eight year cycles, creating volatility in dollar valuations.
The downside of relatively quick moves in expansion and contraction is that the
Usd does not have time to re-establish new values as well as other currencies, and
because of global commodities being priced in dollars, the quicker cycles can create
inflation pressures that are historically stronger than previously noted. The killer
effects of consumer inflation, coupled with increasing debt levels are weighing
heavily on the U.S. business cycle's lifespan.
As the U.S. moves along its own cycle, so the global economies follow theirs, but
right now the moves are out of sync; the global market's peak phase came at the
same time as the U.S. contraction phase started, and that is now leading to a period
where the U.S. tries to expand as some overseas regions are already looking hard
at the impact of solid growth. The real question is how the market prices Usd based
debt; any GDP growth will be negated by forward debt valuations, especially if overseas
regions are expanding ahead of the U.S.
The U.K. is dealing with every bit as strong a recession as the U.S., and is seeing
consumer confidence levels stripped to the bone. The Euro-zone is expanding from
an economic slow-down from the effects of the credit crisis and reductions in bank
lending. Australia is down-grading overseas growth and absorbing interest rate increases
and implementation in an effort to control an economy that is leading the global
business cycle. Japan has struggled in their business cycle phases, and has absorbed
failed quantitative easing programs, stagflationary pressures, and now the impact
of the tragic earthquake in March.
All-in-all we are seeing a base in global economics as the trough phase completes,
and as a consequence of that the value of the Usd may automatically decrease having
already absorbed a lot of contraction-related bad news. As the U.S. looks to get
out of the business cycle trough, and can overcome housing and employment woes,
the other major forex economic regions may become empowered by the U.S. consumer.
In the near-term that may be enough to allow other economic regions to overtake
the U.S. because of having far less debt to finance.
Those moves will decrease dollar valuations, increase oil prices, increase global
inflationary fears, and allow a period of trade to happen where, for the first time
in twelve to eighteen months, the dollar finds sellers in strong enough numbers
to be able to break 75.00 on the dollar index.
This may turn out to be the start of a sideways distribution phase, after a possible
near-term dollar rally if equity trade finds sellers, ahead of more dollars getting
sold over the next year as the U.S. administration deals with a public 'Strong Dollar
policy that is anything but wanted in reality.
The most robust periods of U.S. economic expansion have been on the back of a weaker
Usd, and with the amount of Usd based debt now in the market, it may be very difficult
for the dollar to do much more than reverse near-term oversold conditions on the
days that equity markets go lower. Traders however will be looking at the mid-term
signals that are still very much in short-dollar mode.
In the near-term, history tells us, global business cycle anticipation has more
of an impact on currency valuations than anything else; and that is what traders
are now starting to see reflected across global asset class charts. The four hour
cycles, the near-term support and resistance, linear trend-lines, and daily moving
average areas are all getting threatened at the same time.
If things break as Usd weakness it will be a technical reflection of a shift in
the global business cycle expectation. The U.S. expansion cycle historically comes
from a sustained period of Usd weakness, and that is what traders are about to see
over the mid-term, if global equity trade holds in the green.
The signals are there that the markets just cannot get the dollar index easily over
the 78.00 price range; it will not go up when other related markets are moving lower.
March may have been a near-term swing point, and if oil prices get back above $110
a barrel it may be that 75% of trader's attention needs to be on short-dollar set-ups,
following the global business cycle path, with 25% of attention going towards long-dollar
moves on days that equities move hard to the downside. TheLFB trade team will signal
and alert clients directly as things unfold.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Disclaimer And Disclosure
Forex trading involves substantial risk of loss and is not suitable for everyone.
Each investor should assess his or her financial situation and risk tolerance before
proceeding.
Information, analysis and methodologies provided on The London Forex Broadsheet(TM)
are for informational purposes only and should not be used as a replacement for
research by an individual investor or licensed investment professional. Neither
The London Forex Broadsheet nor any of its affiliates shall be liable for any errors,
omissions or for any actions taken in response to information contained on www.TheLFB-Forex.com
[http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1105053840617&s=4796&e=001hQTBWrmXFJmd_zdpbD_WF_DZAUlTzC5utUinzERxeBGQ3a8Dhwrfr6biOgQoLfVkrXRQ9kHwJAduX0xS0VPSdh_6SBDCIlQlFnwfQ6QGXSQCNhWrXDuK6w==]
or any affiliated or other linked sites. All users agree that the information contained
in The London Forex Broadsheet shall not be re-distributed or reproduced except
with express written consent of LFB Services(TM), LLC.
Any non-affiliated services which users may access through the links on the web
site which may include brokerage firms shall be deemed independent of LFB Services,
LLC. The London Forex Broadsheet is not a registered brokerage firm and any links
provided to such companies are for your convenience only. The London Forex Broadsheet
shall not be liable for any damages or costs of any type incurred in conjunction
with your use of the services of any third party listed on the site.
The London Forex Broadsheet hereby makes no representations or warranties regarding
the accuracy of any information contained on www.TheLFB-Forex.com [http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1105053840617&s=4796&e=001hQTBWrmXFJmd_zdpbD_WF_DZAUlTzC5utUinzERxeBGQ3a8Dhwrfr6biOgQoLfVkrXRQ9kHwJAduX0xS0VPSdh_6SBDCIlQlFnwfQ6QGXSQCNhWrXDuK6w==]
or any affiliated or other linked sites.
This Risk Disclosure shall apply to all communications transmitted from The London
Forex Broadsheet.
© 2011 LFB Services, LLC. All Rights Reserved.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Forward email
http://ui.constantcontact.com/sa/fwtf.jsp?llr=d7egsfcab&m=1101845959555&ea=drerhys.fxrobot@blogger.com&a=1105053840617
This email was sent to drerhys.fxrobot@blogger.com by alerts@thelfb.com.
Update Profile/Email Address
http://visitor.constantcontact.com/do?p=oo&m=0018oWxXngphl7LgwlNa01m1w%3D%3D&se=001zpH_JGC-3-Y%3D&t=001Q5qpqmOrMqLfGANBBOkC3A%3D%3D&lang=001FCSs65SMrsI%3D&reason=001IqezpQbqEsU%3D&llr=d7egsfcab
Instant removal with SafeUnsubscribe(TM)
http://visitor.constantcontact.com/do?p=un&m=0018oWxXngphl7LgwlNa01m1w%3D%3D&se=001zpH_JGC-3-Y%3D&t=001Q5qpqmOrMqLfGANBBOkC3A%3D%3D&lang=001FCSs65SMrsI%3D&reason=001IqezpQbqEsU%3D&llr=d7egsfcab
Privacy Policy:
http://ui.constantcontact.com/roving/CCPrivacyPolicy.jsp
Online Marketing by
Constant Contact(R)
www.constantcontact.com
TheLFB | 3370 N. Hayden Rd. #123 | Scottsdale | AZ | 85251
Forex Trading Explained In A Simple To Grasp Manner
Forex trading actual is rather similar to baseball card trading that you may have done when you were younger. Of course you can still trade baseball cards now that you are an adult but it won't necessarily provide you with the success that Forex trading will. Of course there is always the chance that you will find that one rare card that has been eluding everyone and make a fortune.
Forex trading uses the same principles but involves the exchanging of foreign currencies rather than the exchange of one ball player for another. These principles will help you to understand how Forex trading works. In baseball card trading you want to trade the card that will provide you with a profit when you resell it. Forex trading works the same way.
Of course trading money sounds risky. But it actually is rather simple and there is no minimum that you need to involve unlike many other methods of investing. So the risk can be greatly reduced. You also are not limited to the time of the day that you can trade. Forex trading can be conducted 24 hours a day from Monday to Friday.
There is a level of excitement that is inherent with Forex trading. It is important to keep in mind that there are risks involved with Forex trading. This is real; you are not trading playing cards, you are exchanging money. Like any other investment it is always a good idea to start with a small amount then gradually increase the amount you are willing to invest. Remember to never invest more than you can afford to lose.
To explain this in a little more detail you imagine you want to trade dollars for Euros because you feel the value of the euro is increasing while the strength of the dollar is diminishing. You elect to trade 150 dollars for 100 Euros. Then you monitor the strength of the dollar versus the euro and when you are satisfied that the euro has strengthened in comparison to the dollar you trade back the Euros for the dollars. Only now you get'0 dollars for the 100 Euros. You have made a profit of $30 or 20%.
This example may be a little simplified but it helps explain the basic principles behind Forex trading. The example however is realistic. It is not unheard of to gain a 20% profit on Forex trading. In comparison to other investment this is a rather high profit ratio, particularly considering the minimum amount of risk involved.
The important thing to remember is that a little profit will fuel some excitement and may even convince you, you are invincible. Do not let a little success fool you. You need to use the same caution with Forex trading as you would at a poker game. Never get greedy and always know when to walk away. The worst thing you can do with any investment is to invest more than you can afford to lose. Remember what is really important and this influence how much you are willing to gamble. Regardless of the limited risk any investment is really just a matter of taking a gamble.
About the Author:
Action Insight Daily Report 4-4-11
Click here
http://campaign.r20.constantcontact.com/render?llr=5ymfsnbab&v=001cNWX07JYSkRHdig2fYtcTmHMLQE1FN8QX6tg4Km00ryZNsfnkwZM0387UkGtlt9G6WPLy3b-TtCM3C96oKrNTONvWBNIxF4aZjv8vHDx4iPiesRVzdA5aSsbH7OVy_kL
Daily Report: Dollar and Yen Start the Week Mildly Lower
Dollar and yen open the week mildly lower as last week's risk appetite trend extends. Aussie edges to new record high above 1.04 against dollar while USD/CAD also dips through 0.962. The BOJ released the 'post-earthquake' Tankan survey today, separating responses received from February 24 to March 11 and from March 12 to March 31. While forward-looking business sentiment for the second quarter was weakened after the earthquake, the headline diffusion indices (DIs) was largely unchanged before and after the natural disaster.
Forward this report to a friend!
http://ui.constantcontact.com/sa/fwtf.jsp?llr=5ymfsnbab&m=1101040628510&ea=drerhys.fxrobot%40blogger.com&a=1105051533899
This email was sent to drerhys.fxrobot@blogger.com by contact@actionforex.com.
Update Profile/Email Address
http://visitor.constantcontact.com/do?p=oo&m=001-JOCTjwxzZ0SP2JB785e0g%3D%3D&se=0010O7B_tofWDw%3D&t=001-XSjS3GIYNUT78nQIz5Z_g%3D%3D&l=001FCSs65SMrsI%3D&r=001y5KaVlBn7_Y%3D&llr=5ymfsnbab
Instant removal with SafeUnsubscribe(TM)
http://visitor.constantcontact.com/do?p=un&m=001-JOCTjwxzZ0SP2JB785e0g%3D%3D&se=0010O7B_tofWDw%3D&t=001-XSjS3GIYNUT78nQIz5Z_g%3D%3D&l=001FCSs65SMrsI%3D&r=001y5KaVlBn7_Y%3D&llr=5ymfsnbab
Privacy Policy:
http://ui.constantcontact.com/roving/CCPrivacyPolicy.jsp
Online Marketing by
Constant Contact(R)
http://www.constantcontact.com/home.jsp?pn=axelerant&cc=custom01
Action Forex Company Limited | Room 1707, 17/F | Treasure Center | 42 Hung To Road | Kwun Tong | Kowloon | 852 | Hong Kong
Saturday, 2 April 2011
Action Insight Weekly Report 4-2-11
Click here
http://campaign.r20.constantcontact.com/render?llr=5ymfsnbab&v=001VxpbIorwhVO-YmowMwlkvapldvclpeFlTMCwBzc7SFvPPo7chwVcAUjs8QFILdFOwq94DvIQX0NRSENlI79niTaoNAb2FPyNqTDUhcl2p6wZKJvWMU2_Sn7cI2331duq
Yen Selloff Resumed as Carry Trade Returned
The Japanese yen was broadly sold off last week as it's back becoming the favored carry trade funding currency in the current risk seeking environment. Stocks was back above pre-Japan disaster higher with DOW breaking 12931 resistance on solid economic data. Canadian dollar was the strongest gainer last week as crude oil jumped through recent resistance of 106.95. Australian dollar was also strong and made new record high against US dollar. Among European majors, Euro remained the strongest one as supported by rate expectations. Swiss Franc was weak as it's seen as another candidate for funding carry trades. Meanwhile, Sterling was mixed on relatively uncertain rate outlook.
Forward this report to a friend!
http://ui.constantcontact.com/sa/fwtf.jsp?llr=5ymfsnbab&m=1101040628510&ea=drerhys.fxrobot%40blogger.com&a=1105036888355
This email was sent to drerhys.fxrobot@blogger.com by contact@actionforex.com.
Update Profile/Email Address
http://visitor.constantcontact.com/do?p=oo&m=001-JOCTjwxzZ0SP2JB785e0g%3D%3D&se=0010O7B_tofWDw%3D&t=001SKbQeaTHhSziFM7r0I6IxQ%3D%3D&l=001FCSs65SMrsI%3D&r=001y5KaVlBn7_Y%3D&llr=5ymfsnbab
Instant removal with SafeUnsubscribe(TM)
http://visitor.constantcontact.com/do?p=un&m=001-JOCTjwxzZ0SP2JB785e0g%3D%3D&se=0010O7B_tofWDw%3D&t=001SKbQeaTHhSziFM7r0I6IxQ%3D%3D&l=001FCSs65SMrsI%3D&r=001y5KaVlBn7_Y%3D&llr=5ymfsnbab
Privacy Policy:
http://ui.constantcontact.com/roving/CCPrivacyPolicy.jsp
Online Marketing by
Constant Contact(R)
http://www.constantcontact.com/home.jsp?pn=axelerant&cc=custom01
Action Forex Company Limited | Room 1707, 17/F | Treasure Center | 42 Hung To Road | Kwun Tong | Kowloon | 852 | Hong Kong
Forex Market Updates & Commentary
Forex Market Updates & Commentary |
- The Week Ahead from FXDD (PDF Report)
- EURUSD moves closer to key resistance at 1.4280
- Portugal’s Rating Cut to BBB-
- EURUSD moves to other extreme
- Feds Hoenig says rates should rise in late summer
- Fed’s Dudley on the Wires
- EURUSD squeezes higher to 100 and 200 hour MA area
The Week Ahead from FXDD (PDF Report) Posted: 01 Apr 2011 01:10 PM PDT To access PDF Report CLICK HERE |
EURUSD moves closer to key resistance at 1.4280 Posted: 01 Apr 2011 11:38 AM PDT The EURUSD has made new highs for the week and the shorts and new buying push the market higher. The key resistat at the 1.4280 level is getting closer. The level corresponds with the high from November 2010 (at 1.4281), the upper trendline and the downward trendline from the July 2008 high (connecting to the November 2009 high). The three lines come in near the area. I would expect good profit taking selling as the price moves closer and closer. Next week the ECB will tighten credit conditions. The expectations is a 25 basis point increase but the possibility exists for 50 basis points if the central bank wants to make a statement. The decision wll come on Thursday (along with the BOE interest rate decision) at 7:45 AM. Jean Claude Trichet will give his customary press briefing at 8:30 AM ET. |
Posted: 01 Apr 2011 09:48 AM PDT Portugal’s Rating Cut to BBB- by Fitch, may be cut to junk. |
Posted: 01 Apr 2011 09:10 AM PDT |
Feds Hoenig says rates should rise in late summer Posted: 01 Apr 2011 09:01 AM PDT
Hoenig is a hawk and his comments are reflective. |
Posted: 01 Apr 2011 08:06 AM PDT Says:
|
EURUSD squeezes higher to 100 and 200 hour MA area Posted: 01 Apr 2011 07:35 AM PDT |
You are subscribed to email updates from Forex News and Commentary by FXDD To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
Google Inc., 20 West Kinzie, Chicago IL USA 60610 |
Wednesday, 30 March 2011
Action Insight Daily Report 3-30-11
The Japanese yen falls across the board this week as risk appetite continues to rebound from the low post natural disaster in Japan. DOW rose 81 pts overnight and closed strongly near to this week's high. Asian equities also followed with Nikkei up nearly 200pts. EUR/JPY has taken out key near term resistance on ECB rate expectations. AUD/JPY also broke key resistance level as carry trade returns. Judging from the relative reaction to risk appetite and the strength in USD/JPY, the Japanese yen is back to be the most favored funding currency for carry trades. Comments from Fed Plosser and Bullard raised some possibility that Fed could start normalizing policies earlier than expected and support dollar comparing to the yen.
Tuesday, 29 March 2011
TheLFB Sentiment and Momentum Indicator (SMI)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Sentiment & Momentum Indicator
Mar 29, 2011
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Sentiment and Momentum Indicator (SMI) detail shown below forms part of TheLFB
subscription service, which analyzes global market trade, including intra-day trend,
momentum, and price action points using a 1-hour chart analysis. Subscribers receive
intra-day email alerts whenever the SMI system triggers a change in global price
action, sentiment, and momentum, on each asset class.
Equity Indices, gold, silver, oil, dollar index and currency pairs are all covered.
The intra-day SMI service is in addition to our trading plans, which are issued
for each asset class and made available to clients at the close of business each
day for a 24 hour trading.
The trade plans offer a deep analysis of each asset class, which allows investors
and traders to plot a course through the global market trading day on those sectors
of interest to them.
Sincerely,
TheLFB Trade Team
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Intra-day Equity Indices SMI
Alert Updates:
S&P 500:
Long momentum, mixed trend. Long from 1318 targeting 1322. Short from 1308 targeting
1299
German Dax:
Long momentum, Short trend. Long from 6985 targeting 7025. Short from 6930 targeting
6860
Japanese Nikkei:
Long momentum, Short trend. Long from 9560 targeting 9625. Short from 9440 targeting
9345
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Intra-day Commodity SMI
Gold Bullion:
Short momentum, Mixed trend. Long from 1424 targeting 1438. Short from 1415 targeting
1399
Silver Bullion:
Long momentum, Long trend. Long from 37.30 targeting 37.70. Short from 36.75 targeting
35.75
WTI Crude Oil:
Long momentum, Long trend. Long from 105.50 targeting 106.15. Short from 103.90
targeting 102.90
10-year Treasury Note:
Short momentum, long trend. Long from 121.50 targeting 121.70. Short from 121.05
targeting 120.80
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Intra-day Currency SMI
Dollar Index:
Long momentum, Mixed trend. Long from 76.80 targeting 77.25. Short from 76.40 targeting
75.95
Eur/Usd:
Short momentum, Mixed trend. Long from 1.4135 targeting 1.4205. Short from 1.4065
targeting 1.4020
Gbp/Usd:
Short momentum, Mixed trend. Long from 1.6025 targeting 1.6095. Short from 1.5965
targeting 1.5910
Usd/Jpy:
Long momentum, Mixed trend. Long from 82.65 targeting 83.00. Short from 82.05 targeting
81.45
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Disclaimer And Disclosure
Forex trading involves substantial risk of loss and is not suitable for everyone.
Each investor should assess his or her financial situation and risk tolerance before
proceeding.
Information, analysis and methodologies provided on The London Forex Broadsheet(TM)
are for informational purposes only and should not be used as a replacement for
research by an individual investor or licensed investment professional. Neither
The London Forex Broadsheet nor any of its affiliates shall be liable for any errors,
omissions or for any actions taken in response to information contained on www.TheLFB-Forex.com
[http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1104997533574&s=4796&e=001TT3brnZh_jzW-jxViML8MknVWpiOKLlvA8ozMUnn1AXxSywyrKCF63QM4kgSfTiVrIcpVjs6eD-aHZKH3l5s1ZXFWSAZggjaoVlPQ_otC45sQWB6a8u0eQ==]
or any affiliated or other linked sites. All users agree that the information contained
in The London Forex Broadsheet shall not be re-distributed or reproduced except
with express written consent of LFB Services(TM), LLC.
Any non-affiliated services which users may access through the links on the web
site which may include brokerage firms shall be deemed independent of LFB Services,
LLC. The London Forex Broadsheet is not a registered brokerage firm and any links
provided to such companies are for your convenience only. The London Forex Broadsheet
shall not be liable for any damages or costs of any type incurred in conjunction
with your use of the services of any third party listed on the site.
Forex Market Updates & Commentary
The EURUSD is not the only currency pair to squeeze back higher. The GBPUSD has also moved to the upside and tests the 50% of the days range and the converged 100 and 200 bar MA on the 5 minute chart. The level comes in at the 1.5992 (for the 50% ) and the 1.5996 level for the 100 and 200 bar MA.
These levels should solicit some selling pressure with 1.5974 -79 as downside support. Should this level hold, the pair will likely squeeze higher. A move below this area makes the trading for the day more difficult as both bulls and bears would be frustrated.
S & P notes increased risk to Greeces Budgetary Position
Posted: 29 Mar 2011 07:05 AM PDT
Posted: 29 Mar 2011 07:01 AM PDT
Posted: 29 Mar 2011 06:36 AM PDT
S&P lowers Portugal to BBB- for BBB, A-3 at S&P , Outlook negative.
Posted: 29 Mar 2011 06:36 AM PDT
The rating was BBB. S& P also removed Portugal from negative credit watch.
The Portuguese bond yields have increased to 8.74% from 8.49% last week and 7.68% at the end of the March 18th week.
The downgrade from S&P was somewhat expected given S&P downgrade of Portuguese banks including the Portuguese division of Banco Santander and Banco Espirito Santo.
US Consumer Confidence Due at 10AM
Posted: 29 Mar 2011 06:25 AM PDT
USDJPY moves toward key 100 day MA
Posted: 29 Mar 2011 06:24 AM PDT
The 100 day MA comes in at 82.60 in the USDJPY. This level should find profit taking sellers with stops on a move above the key level.
The price in the USDJPY has been below the level since March 11th, the day of the earthquake and tsunami.
Taking a look at the hourly chart for the pair, the price formed a bull flag for the pair and targets the 82.50 for the move. This too should give profit taking sellers another reason to take some gains in their trading.
Posted: 29 Mar 2011 06:06 AM PDT
The Case Schiller confirm numbers in the existing home sales data and the new home sales data that was released last week. That is, home prices are continuing to fall. If you recall New Home sales median price fell to $202k from $234K. Exisiting home sales median price fell to $156K from $158K.
Foreclose homes keep on entering in the market and this keeps buyers in charge. This makes it difficult for conventional home sales to take place. Eighteen of twenty cities showed price declines. The largest YoY decline came in Phoenix with a 9.1% fall. Washington showed the largest YoY increase coming in at +3.6%.
Should employment continue to rise, this may open the door for new buyers to come in and snap up low cost housing. However, with estimates of foreclosures rising by 20% in 2011 (RealtyTrac), the glut should continue and keep the price pressure on housing.
S&P CaseShiller Home Prices Fall
Posted: 29 Mar 2011 06:02 AM PDT
S&P/CaseShiller Home Price Ind: Actual: 140.86 Prior: 142.42 Revised: 142.34
S&P/CS 20 City (MoM%) SA: Survey: -0.44% Actual: -.22% Prior: -0.41% Revised: -..39%
S&P/CS Composite-20 (YOY): Survey: -3.20% Actual: -3.06% Prior: -2.38% Revised: -%
Posted: 29 Mar 2011 05:34 AM PDT
The German inflation for YoY came in at 2.2% which was as expected. The Flash estimate for CPI for the EU comes out on the 31st and is expected to show an unchanged reading of 2.4%. ECBs Trichet seems intent on raising rates at the April 7th meeting. Today ECBs Makuch spoke out of both sides of his mouth when he said a rate rise was highly probable but not certain. The market is expecting a 25 basis point rise to 1.25%. This will be the first change in rates since May 2009 when the rate was lowered to 1% from 1.25%
The Forex Morning Call for March 29th
Posted: 29 Mar 2011 05:24 AM PDT
Bobbys Corner-Open Market-March.29.2011
Posted: 29 Mar 2011 05:24 AM PDT
Good Morning:
Federal Reserve member Bullard stated overnight that the FOMC may not be able or willing to wait out the global uncertainties before the US satrts normalising it’s monetary ploicy.
The uncertainties that he is speaking about are:
1) Political unrest in Middle East and North Africa
2) Japanese crisis (earthquake and nuclear)
3) European sovereign debt problems
4) US deficit
US monetary officials seems to be more hawkish lately, but before any decisions the policy makers better be certain that the US economic recovery is on a positive path, and that consumer sentiment is improving and not deteriorating. With the price of gasoline rising daily (it sure seems like it), and rising global tensions on the political front-I think we may see weak consumer sentiment datalater this morning.
World equity markets traded lower-US Futures are higher at this time.
Oil:$103.14 Gold:$1415.80
TIME | FOR | EST. | PRIOR | |||
9:00A.M. | S&P/CASESHILLER HOME PRICE IND. | JAN. | 142.42′ | |||
9:00A.M. | S&P/CS 20 CITY MoM% SA | JAN. | -0.40% | -0.41% | ||
9:00A.M. | S&P/CS COMPOSITE -20 YoY | JAN. | -3.20% | -2.38% | ||
10:00A.M. | CONSUMER CONFIDENCE | MAR. | 65.O | 7O.4 |
HAVE A GOOD DAY & GOOD LUCK
ECB Makuch says rate increase in April NOT certain, but highly probable
Posted: 29 Mar 2011 04:42 AM PDT
- Situation in Portugal is serious but complicated and does pose a risk of contagion
- Rate increase is highly probable but NOT certain
- ECB vigilant on inflation
The comment is a bit ambiguous with “probable” but “not certain” used to describe the rate potential in April. The ECB meets on April 7th and the expectation from surveyed results is for a tightening of 25 basis points.
The EURUSD bounced off support at the 1.4059 and looks toward the channel trendline on the 5 minute chart. That level currently comes in at the 1.4077 level and coming down. A move above this level would next target the 1.4093 level where the 38.2% of the days range is found. Just above that is the 200 bar MA (1.4095 currently) on the 5 minute chart (see green line in the chart below). This is also resistance for the pair. If the price can stay below the 38.2% of a steep move to the downside (or upside), it will often be a clue, the downside may still have some momentum. Support remains at 1.4058, and below that the lows from Monday’s trade at the 1.4020-25 area.
S&P CaseShiller Data Due at 9AM
Posted: 29 Mar 2011 04:23 AM PDT
Action Insight Mid-Day Report 3-29-11
Click here
http://campaign.r20.constantcontact.com/render?llr=5ymfsnbab&v=001AOTdCtwnZM_Td-xhnEuCgy8jsrSWt5gdF1-bjpMVm1Igj84rBwkW4D2C2IBsDwmglz8p6aMQ3bC0MXdZNKVvcfVfLlM5hEMvaPj12grHuQhG_L5fwS0ogamxVTdmVCQG
Mid-Day Report: Dollar Recovers on Bullard's Comment, Yen Broadly Lower
Dollar is firmer today as again lifted by hawkish comments from St. Louis Fed Bullard. Bullard said that normalization of monetary policy will be a key issue for Fed this year but Fed "may not be willing or able to wait until all global uncertainties are resolved to begin normalizing policy." And, while normalization begins, Fed would still leave "unprecedented policy accommodation on the table." This is in contrast to comments from Chicago Fed Evans, who noted that completion of the USD 600b QE2 program in June is "just about the right number" and suggested Fed will "continue to have a high amount of accommodation" after that. Also, the greenback is supported as this week's retreat in crude oil and gold continues.
Forward this report to a friend!
http://ui.constantcontact.com/sa/fwtf.jsp?llr=5ymfsnbab&m=1101040628510&ea=drerhys.fxrobot%40blogger.com&a=1104994023776
This email was sent to drerhys.fxrobot@blogger.com by contact@actionforex.com.
Update Profile/Email Address
http://visitor.constantcontact.com/do?p=oo&m=001-JOCTjwxzZ0SP2JB785e0g%3D%3D&se=0010O7B_tofWDw%3D&t=001NtauNPcEW8IE_HCHUeVoZw%3D%3D&l=001FCSs65SMrsI%3D&r=001y5KaVlBn7_Y%3D&llr=5ymfsnbab
Instant removal with SafeUnsubscribe(TM)
http://visitor.constantcontact.com/do?p=un&m=001-JOCTjwxzZ0SP2JB785e0g%3D%3D&se=0010O7B_tofWDw%3D&t=001NtauNPcEW8IE_HCHUeVoZw%3D%3D&l=001FCSs65SMrsI%3D&r=001y5KaVlBn7_Y%3D&llr=5ymfsnbab
Privacy Policy:
http://ui.constantcontact.com/roving/CCPrivacyPolicy.jsp
Online Marketing by
Constant Contact(R)
http://www.constantcontact.com/home.jsp?pn=axelerant&cc=custom01
Action Forex Company Limited | Room 1707, 17/F | Treasure Center | 42 Hung To Road | Kwun Tong | Kowloon | 852 | Hong Kong
What The Great Depression Has Taught Us?
Saving money and reducing your costs is the golden rule if you want to get rid of financial instability. The ideal situation would be for people to cease making new credits and to do everything in their power to cover the existing debts. This way, the creditors will be able to regain the money they have lost while offering credits to their clients and the world economy will slowly recover.
The second aspect you may improve in your life is to replace ready-made products with objects that you may create yourself. Since they didn't have the financial means to purchase all the clothing items and furnish pieces they wanted, most people would dedicate themselves to do-it -yourself activities in the 30s that helped them overcome the crisis. In addition to the fact that you will create resistant products with less money, you will achieve a highly rewarding feeling once your projects will be finished.
Wary consumers will have a lot to gain this year as they will reduce the money they spend on food and other products and thus, avoid getting affected by the economic downfall. Most people throw their food away or their old devices once they become old or broken; yet, you can save a lot of money by reusing old fabrics and apparatuses in order to create new and functional ones. These products may not be as good as new but they will surely help you get through these rough days.
All this saving and wary consumerism will enable you to gain your money back; in this case, we recommend you to invest your savings instead of depositing it in the bank. There are numerous ways you can invest your money in a period of economic recession as tangible products like gold or oil are very likely to become more expensive and thus, you will double or triple the invested sum of money.
About the Author:
Economic Predictions For 2011
The beginning of 2011 was promising. The nations previously hit by recession seemed to slowly recover. The bad news is that the small growth remains in the field of theory while a large amount of people will not be able to notice it in their day by day existence. Many nations still deal with high inflation and unemployment. Although USA keeps its inflation within controllable parameters, this is not the case of unemployment. American political leaders thought that supporting the industries which create jobs would be a solution to this problem, but reality comes to disappoint everybody. Profits were used by corporations to augment share prices and not hire people. By contrast, economies with high rates of growth like India and China seem to be more open to hiring. In respect to unemployment, the predictions for 2011 are not very positive. It seems that its rate will remain high in quite a number of developed states, including the USA.
Another interesting evolution is the one of the oil market. It affects not only the budgets of car drivers but also the price of food. The revolutionary movements in North Africa were followed by a raise of the oil price but Saudi Arabia's forecast of augmented production generated a lowering effect on it. Predictions show that oil price will continue to grow in 2011 but not as much as to affect the economic recovery of the rich countries formerly hit by crisis.
There is no news in the fact that America depends on oil, but it also counts on other tools such as its powerful economy and low inflation to minimize the effects of a price jump. Things are somehow different in Europe. Fuel is highly taxed here which means that rising oil prices will not shake the economies too hard. The risk however comes from the central bankers who fear such a raised price and therefore their pre-emptive actions might prove too drastic, thus endangering European economies who are still trying to overcome the crisis. The Middle East has its own problems. Fuel and food subsidies need to be reduced here and support needs to be given to poor classes. Unfortunately, for the moment, no Arab ruler is ready to take such actions.
The price of gold is also very important in the economy. Its evolution cannot be accurately predicted, but analysts come up with their own attempts based on historical data. Some of them forecast a highest gold price of 5,000 dollars per ounce. Others consider mass psychology and affirm that peoples distrust in this peak of 5,000 dollars per ounce will lead to a resistance against its materialization. A third category of analysts predict a downward movement of gold price in 2011 due to a recovery of the market. Taking into account all these theories regarding the evolution of gold market, there is only one conclusion to be reached: if you want to buy gold, now is the perfect time to do it.
About the Author:
Antique Toys - 3 Things New Collectors Should Know
1) Choose A Type Of Toy To Collect
Although you could simply start collecting any antique toys that you come across, it helps to consider the exact type of toys you'd like to collect before you get started. For example, you may choose to specialize in antique dolls, or even diecast collectibles. This doesn't mean you can't branch out at a later date. But, for new collectors, it helps to keep things simple so you can learn as much as possible about the specific kinds of antique you plan on collecting. If you're stuck for ideas, try starting with something you already love or at least have some interest in.
2) Remember The Investment You Are Making
No matter whether you're going to buy diecast collectibles to resell in the future, or just want to collect vintage dolls, antique toys should always be seen as an investment. Choosing right - by inspecting all the details to make sure you're getting a good deal - could mean you'll make a lot of money when you resell them in future. Check when the toy was first created, how well it's been made, and that any removable parts are original.
3) Knowing Where To Look
As a new collector of antique toys, you'll slowly learn about the best places to find your collectible vintage dolls and other toys. The internet has now made the task of finding those collectibles a lot easier, though you may still find deals in your local area and classified ads. There are a number of online stores and auction websites that offer excellent opportunities for any collector.
Don't be afraid to ask a number of questions when searching online - in fact it's recommended, as you'll want to be absolutely sure of what you're getting. They should already provide you with photographs, detailed descriptions of the toys, when they were made and so on.
About the Author:
Usd/Treasury Links In Unchartered Waters
Click here
http://campaign.r20.constantcontact.com/render?llr=d7egsfcab&v=001AOTdCtwnZM-N_BIjsM54Ge9Cr8wkhSEl11V4cFI7KDx3mXndqP2Y3hvWuyY6t1ndXtHpCL192mOa9mNzJpt-uvIeu5Ovoihp43QwQ7Xhjyz9pVT1zK7gmdPg3YLmUCiU-x9kBZ2se8k%3D
TheLFB Daily Client Note
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Client Note: U.S. Session Preview
March 29, 2011
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Quick Links
Latest Charting Video [http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1104993364181&s=4796&e=001illMVaK_4zzEC2JQRRkiMjn8n4hOHVXqABDPTAU5Q4y9xO-hg2fqQMTMK7xbqjGIJlKOHYCav8uJnvddbv9ylLfvuLSl8KObzL8vykvmf2cpz6Hj5mwQoDvey2Ci2v9XlVAJ_Gels54KEW4CP0N4IQ==]
Newsletter Archive [http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1104993364181&s=4796&e=001illMVaK_4zzaCvgscRzv0W49aVjMUkXvWK2u6q_t644ZJcE-p_Kn9_IJ29oXJ0Mw1RO9g_ZssbpgNJxicF12XjnPLCXQuD3-9Y3c2nCYufgU_WHSCCCp9qON55Ze0ZiYCBP1hrDTnwgNsOGUAJ7v4A==]
Follow us on Twitter [http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1104993364181&s=4796&e=001illMVaK_4zz8cOFnyds489oD4AYx9eRdWDxX8pPzGRqmDj30ogANe-cVUT_t1FdPHx9fyqABg42tX5iz_hZG8V3rmGMHnRvHGKSUF6zGPwl77Tv6cAIm3w==]
Contact Us [http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1104993364181&s=4796&e=001illMVaK_4zxNsuFmGuI4Ne8JFCRbRhXbYoFfzXGTPP3U9c_i3lC8Hn0aZlduLsjAdQo74BEmIIKLuoxl2Hyv3f4BumqZrIQr0P1uZwHpa-OPhYddpJ_YhqC_f4pwgyCrR0oPF3OIfCuvEETGobCfEjsvqzXzsuy7]
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Dear Trader,
Welcome to TheLFB's daily client note. Follow along with the trade team as they
review global markets, headlines, trade divergence, momentum, and currency impact
over the 24 hour trading session. Please use the links opposite to access recent
articles and videos, and to register for trade desk updates.
Sincerely,
TheLFB Trade Team
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Trade Desk Note
The Dollar/Treasury Link
The Federal Reserve historically controls overnight lending rates by increasing
or decreasing the flow of Treasury Notes. Historically, when rates need to go lower,
the Fed buys back from the market a swath of existing Treasury notes, therefore
decreasing market liquidity and increasing the existing note values.
By increasing the value of the note, the reaction is for the yield (interest rate)
to be automatically decreased. Lower interest rates come from less notes in circulation.
Historically, when rates need to go up, the Fed sells more Treasury notes, therefore
reducing existing note values and increasing the yield (interest rate). That move
makes more money available to be lent out into the economy; it increases the yield
on the existing notes in circulation, and automatically increases overall market
interest rates.
In a final gesture, the Fed should look to be banking the cash received from the
sale of those notes into their Reserves, so it can then be used in the next cycle
of rate changes. And that is the longer-term query; Reserve amounts are not in-line
with forward debt obligations, and more notes are being printed than can ever be
repaid from current GDP forecasts.
That may be the historical way that the Fed controls interest rates, but the fly
in the Administration (read Treasury Dept. and Federal Reserve) ointment is the
fact that there has never been this amount of notes coming to market, and being
made available. The constant flow of new notes is devaluing the existing and automatically
lifting Treasury yields (interest rates).
At a time when the Fed is absorbing new notes being printed by the Treasury, so
that the stimulus packages can be put into action and cash created to invest as
the Administration wishes, the automatic response is for 10-year yields to rise.
The 10-year Treasury note has the greatest impact on the U.S. economy due to its
influence on long term interest rates.
While the Federal Reserve controls the overnight rate, interest rates paid on long
term financing for capital goods, as well as the housing market, are established
by asserting a premium over the 10-year Treasury note value. In other words, whatever
the 10-year note is worth determines the rates for mortgages, investments and inter-bank
loans that are set from the 10-year yield rates.
Some may feel that the Fed is withholding vital information regarding the danger
of the U.S. economy not easily coming out of the recessionary phase. There has
been no public announcement of any exit strategy to try to unwind the ever-increasing
yield (read mortgage, credit card, auto, commercial real estate, borrowing costs)
which has created wider spreads in the value of insuring against default on the
notes (credit default swaps). This has also impacted the cost of banks doing business
with each other and their willingness to leave risk on their balance sheet for any
sustained period of time.
The fact that the Fed has no choice but to buy back any amount that the market will
not bid freely on, and their commitment to QE2 POMO buy-backs is creating the same
higher rates that the Administration may need to reduce in order for the economy
to more easily grow, and for the Administration to be able to afford the cost of
debt funding. The Fed did its job in creating global liquidity, the Treasury is
doing its job of creating government debt and generating cash, and the Primary Dealers
have done its job of buying equities and commodities that were back-stopped by the
Fed and regional central banks.
Now that quantitative easing may be phased out sooner than originally thought, and
taking out the cost of insurance that the U.S. government stays solvent, it may
be more easily seen why the Usd may start to get bought.
If there are no cash Reserves getting built from the sale and part buy-back of new
notes, and no more QE programs, what will be used to stimulate the next business
cycle drop? And, more importantly, once the required amount of notes have flooded
the market, and yields have exploded, how is the Fed going to repatriate interest
rates? In a strange twist of fate, it may be that higher interest rates instigate
a stronger Usd. The economic cost will remain an unknown, as the Federal Reserve
floated their QE boat into unchartered waters.
Another relationship of note is between the Treasury bond's price, and the interest
rate or premium it offers at any time. It is an inverted relationship; when bond
prices increase, the yield (interest rate) moves lower, and vice-versa. This all
comes from the fact that at maturity repayment of the principle is paid at par value,
and not at bond's market price. Par value = Current Interest Rate/Price.
Example:
A $1000 10-year Treasury note, with a 4% Interest Rate = $1000 x 4% = $40 guaranteed
a year, for 10 years.
If the market price of the note goes down, because of increased amounts of notes
hitting the markets, from $1000 to $500 for example, then the interest rate math
changes.
The same $1000 bond with a 4% interest rate is still guaranteed to pay 4% a year,
but now that it has an open market value of $500, and it is still returning $40,
the interest rate, or Par, is now 8% for as long as the note value holds $500.
It should be pretty clear that the best way to trade bonds is usually during recessionary
times, when bond prices increase due to repeated rate cuts, and in times of equity
selling.
The variable here is the unknown QE2 exit strategy, and how the Fed is going to
stimulate the economy while still containing interest rates. That scenario is creating
fear of loss, sideways forex trade, and volatility that has no release valve.
Updates to this article will be sent via TheLFB daily client notes.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Disclaimer And Disclosure
Forex trading involves substantial risk of loss and is not suitable for everyone.
Each investor should assess his or her financial situation and risk tolerance before
proceeding.
Information, analysis and methodologies provided on The London Forex Broadsheet(TM)
are for informational purposes only and should not be used as a replacement for
research by an individual investor or licensed investment professional. Neither
The London Forex Broadsheet nor any of its affiliates shall be liable for any errors,
omissions or for any actions taken in response to information contained on www.TheLFB-Forex.com
[http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1104993364181&s=4796&e=001illMVaK_4zzvMqlCcXc0UtmtFc--jPv7m6iFAPu8a0z5u2RqFgsK8bYdSjuXb1EvKp0HojKTwSwVRqSe8gnfisPp8lr2zuS8nUrggdwAT10O9h_uPTmQuw==]
or any affiliated or other linked sites. All users agree that the information contained
in The London Forex Broadsheet shall not be re-distributed or reproduced except
with express written consent of LFB Services(TM), LLC.
Any non-affiliated services which users may access through the links on the web
site which may include brokerage firms shall be deemed independent of LFB Services,
LLC. The London Forex Broadsheet is not a registered brokerage firm and any links
provided to such companies are for your convenience only. The London Forex Broadsheet
shall not be liable for any damages or costs of any type incurred in conjunction
with your use of the services of any third party listed on the site.
The London Forex Broadsheet hereby makes no representations or warranties regarding
the accuracy of any information contained on www.TheLFB-Forex.com [http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1104993364181&s=4796&e=001illMVaK_4zzvMqlCcXc0UtmtFc--jPv7m6iFAPu8a0z5u2RqFgsK8bYdSjuXb1EvKp0HojKTwSwVRqSe8gnfisPp8lr2zuS8nUrggdwAT10O9h_uPTmQuw==]
or any affiliated or other linked sites.
This Risk Disclosure shall apply to all communications transmitted from The London
Forex Broadsheet.
© 2011 LFB Services, LLC. All Rights Reserved.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Forward email
http://ui.constantcontact.com/sa/fwtf.jsp?llr=d7egsfcab&m=1101845959555&ea=drerhys.fxrobot@blogger.com&a=1104993364181
This email was sent to drerhys.fxrobot@blogger.com by alerts@thelfb.com.
Update Profile/Email Address
http://visitor.constantcontact.com/do?p=oo&m=0018oWxXngphl7LgwlNa01m1w%3D%3D&se=001zpH_JGC-3-Y%3D&t=001d4bpAHU1wL8TDp-O5u5DiA%3D%3D&lang=001FCSs65SMrsI%3D&reason=001IqezpQbqEsU%3D&llr=d7egsfcab
Instant removal with SafeUnsubscribe(TM)
http://visitor.constantcontact.com/do?p=un&m=0018oWxXngphl7LgwlNa01m1w%3D%3D&se=001zpH_JGC-3-Y%3D&t=001d4bpAHU1wL8TDp-O5u5DiA%3D%3D&lang=001FCSs65SMrsI%3D&reason=001IqezpQbqEsU%3D&llr=d7egsfcab
Privacy Policy:
http://ui.constantcontact.com/roving/CCPrivacyPolicy.jsp
Online Marketing by
Constant Contact(R)
www.constantcontact.com
TheLFB | 3370 N. Hayden Rd. #123 | Scottsdale | AZ | 85251
Options Income Spreads
Most of us Condor traders have been making money over the last few months with little effort or adjustments at all. It is so great, at times, with this kind of income spread. There are times that we have very few adjustments to make. If the underlying simply trends stays within a tight price range, then the Condor works well and cash flows the market almost each day.
It is a great thing making money this way. It is very low stress, and at times you will have a steady income. This is one time that the stock market will give us the chance to really enjoy our option strategies and without the stress it is a great way to make a living.
I have had a chance to learn a better, different, more cautious way to trade Iron Condors. While most option teachers have a more aggressive approach to this trading strategy, I have learned a safer method by studying with San Jose Options. I can sleep in rest assured that my options portfolio is not being exposed to high risk. While other option traders have to get up at the beginning of the stock market each day in case they have to make an adjustment.
I have been easily making 10% on this new way of trading for the last few months. Believe me; I haven't had to make many adjustments at all. I can put the trade on and let the trade and my money work for me. The way I used to trade, I was making several adjustments, but with my new trading technique, the market never hits my adjustment points, not one single time. I have to say, I am really enjoying trading with the stock market now.
About the Author: