Wednesday September 30, 2009 - 12:51:37 GMT
Share This Story
Black Swan Capital - www.blackswantrading.com
Warm up for Friday...
Banks round the world have still to reveal about half of their likely losses resulting from the financial and economic crisis. (Financial Times)
German unemployment rose in September. (Bloomberg)
South African credit growth slumped to its lowest in almost 43 years in August. (Bloomberg)
Australian retail sales, approvals to build private homes and bank mortgage lending jumped in August. (Bloomberg)
China's manufacturing expanded in September for a sixth month and employment rose at its fastest rate in two years. (AP)
Black Swan Live Webinar Event Today â€“ Courtesy of Tom Busbyâ€™s DTI
Topic: Emerging Market Currencies
Time: 12:00 noon EST
â€śAnything in any way beautiful derives its beauty from itself and asks nothing beyond itself. Praise is no part of it, for nothing is made worse or better by praise.â€ť
FX Trading â€“ Warm up for Fridayâ€¦
There have been many cryptic and not so cryptic comments of late from Federal Reserve Bank speakers. Some are implicitly calling for rate hikes sooner rather than later to mop up all the mess of money excess, others explicitly saying the Fed will likely surprise on the aggressiveness of future hikesâ€¦but the market doesnâ€™t seem too concerned about that today, as the dollar is back under pressure this morning and trading lower against all the majors. I guess it was time for the dollar to take a breather, as it strung together a two-day rally. Two-day rallies are rare for Mr. Greenie these days.
Aussie has surged to fresh post-crisis high against the buck on more good economic news from down under. China continues to keep the music playing with another month of officially reported increase in manufacturing activity and rising employmentâ€”just in time for their big Beijing bash on Thursday for the party faithful. But keeping the music playing has caused concerns, as overcapacity in China is rampant, especially in the steel industry.
â€śThe State Council, Chinaâ€™s cabinet, said in a strongly worded statement that highly polluting sectors including steel, coke, cement and plate glass must cut capacity, while silicon and wind power producers should pursue more orderly development,â€ť the Financial Times reported.
Though this story doesnâ€™t play into the traders view when it comes to currencies, it might be very important for â€śinvestorsâ€ť in the currency market, assuming there is such a beast left. Why important? Itâ€™s important because Beijing is betting a lot of chips on the proverbial V-shaped recovery.
What if China has it exactly right and the US consumer rebounds in a big way? Well, it might mean the market starts taking Fed speakers seriously. That might throw quite a monkey wrench into the idea of the US dollar as the key carry-trade currency, something traders now seem to be feasting upon.
It has been those better than expect non-farm payroll days that have juiced both stocks and the dollar on the same day. We will likely find that out on Friday on the release of US non-farm payrolls report for September. But today we get a look at Fridayâ€™s warm-up act in the form of the ADP Employment Report [the ADP Employment Report defined]. [Chart not available in text format.]
So, given the run against the dollar today, just maybe the ADP report will mean something. A good report and bad price action in the buck could tell us something. Stay tuned.
Black Swan Capital LLC
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."