Sunday, October 14, 2007

And the Trend just keeps on rolling.....

The market's once again this week have been tremendously friendly. Stocks have done well and the economic numbers have been a bit stronger then the market had anticipated. I think that the Fed is on hold based on these numbers, as long as there is no further deterioration in the Sub-Prime situation.

As for Trades, I have recently stepped up my risk in a couple of interest rate plays.

I am positions for the Argentinian yield curve to flatten (2% positive carry 1-12mth at the moment). I have similar (but larger) position on in Mexico and Brazil. The Mexico trade is very short duration as I am playing off the very liquid funding situation. The week was ok, and I think that over the course of time these trades will play out very well.

As for majors and O/R positions, curently I have very little on. I have traded those very poorly (counter trend) and feel it best to stay out of those water's for the time being.

EM has been on fire. Russian rates have collapsed this week. The Dong (vietnam) has strengthened as they are looking to free up the restrictions on that currency. Try broke 1.2000,Isk broke 60.00 and Brazil broke 1.8000. No reason to "buck" this trend as it is way to strong. Just make sure you keep your position small enough to exit if things go poorly....quickly.....which can happen in these markets. This was my problem in July with Argentina. I will try not to re live that one in the case things go poorly all of a sudden.

Good Luck and Good Forex Trading.



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