Wednesday, March 14, 2007

Asian Stocks sink....

The Asian Stock Markets came under pressure last night. This comes as no surprise after the meltdown that the U.S. market experenced yesterday. Wha tI am finding a little interesting is that the only Asian markets which are currently up year to date are the Shanghai up 8.63% (this is the market which collapsed earlier this month), the KL exchange +6.4% and the Karachi exchange +12.35%. So what does this all mean. Well really no thing. I guess the markets needed a flush out and the China move earlier in the month was an excuse rather then the reason. I have cut most of my spot exposure and am sitting mostly with interest rate risk (the wrong way around for now).

Markets are definitly nervous as are dealers. The people that I am talking to are trading very (I repeat VERY) short term. Not my style so I am better off on the sidelines for now.

This Euro is very intriging to me. I think it should trade higher, but no real movement has occurred. It is definitly on my watch list.




Blogger John Russell said...

With the action in the other crosses, it does seem like the EUR/USD should be trading higher. Technically, on the 3hr and daily, it looks like it might be forming a 123 pattern and getting ready for a drop. Add to that commercials are way short and they are starting to go a little long on the USD. Seems counterintuitive, but doesnt the market always seem to work like that?

I too have been trading short terms spikes with a close eye on everything. People are getting eaten up in this market and I am not one of them :-)

4:06 PM  
Blogger Leisa said...

The Financial Times had an interesting article recently (sorry, I'm too lazy to link) about the Chinese potentially swapping USD's for other currency. It was noted that the yen (and I don't have any real, fundamental understanding of this)was the most undervalued of all of the currencies to other denominations. I'd love to see your thoughts. Thanks!

I'm really glad to find your blog.

9:16 PM  
Blogger Banker said...

Hi Leisa,

I think that all comes from the carry trade talk that has been all over the street in recent months. Traders use the Yen to fund other investments. I was in Europe last week meeting co workers from all over the globe and they felt that the Carry trade has been under reported ! This I found strange, but they felt that the market was focusing on the Currency
Carry and did not look at the use of Yen to fund other financial products. Interesting thought. I think that the Yen and Yuan are both undervalued, but also feel they will stay that way for the forseeable future. I run my trading positions from a positive carry point of view. These days it has been more difficult, but luckily been staying slightly afloat. Good Luck.

7:10 AM  

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