Wednesday, July 09, 2008

Yield Monkee poking out its head.

Today was an interesting day to me. I have felt we have been range bound (and I still do), but I think some interesting things are occurring.

1. Crude came off hard today. Sure we have seen this before and it is still north of $135 per barrel but this occurred on a day where the dollar strengthened and I think that is key. I think we can continue to see some weakness in Crude.
2. The Dollar. It has been strengthening over the last few session's even in the face of a rate rise in Europe and poor employment numbers in the States. I look for continued strength, especially against the Yen in the sessions to come.
3. Dollar rates. Currently been trading lower across the board. As part of my range bound senario I look for them to begin to move higher. Not a breakout move but moving higher within the currecnt range.
4. Emerging Markets. Get the Yield Monkee back out. Argentine rates have moved higher, I guess on the back of the Tax situation in Congress, but the Spot continues to hover above 3.00. I think we will test below the 3.00 level in the next few days. The market wants it and it seems so does the Government. Brazil, closed on the weakest level of the day. Tomorrow (July 9) is a local holiday and I tihnk that is a good reason for the weak close. With stocks closing strong I think this move will reverse itself. I also think Usd/Clp and Usd/Cop will trade lower in the coming sessions.
5. Asia. Usd/Korea have been trading heavy for a week now. The Central Bank has been in selling dollars everyday, in sizable amounts. Why fight it. Look for this to continue and look for Usd/Sgd to move in a similar fashion.

Just a few ideas......

Good Luck and Good Currency Trading



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