Friday, November 07, 2008

Stocks lower AGAIN...

Today was a day where I could not have been more wrong. On our daily morning meeting I "predicted" that Emerging Markets would "remain calm" and I saw a move toward a stronger currency as the day progressed. WOW was I wrong. Stocks traded heavy all day, ending down about 440 pts. Brazil, traded to just below limit up. It was saved only by the market closing. Mexico also was under pressure the entire day. The guys in my office were blaming Obama (I am not sure what he has done wrong just yet)but I think it has alot more to do with the mass interest rate cuts that occurred yesterday morning. The ECB and the Swiss National Bank cut 50bp. Czk cut 75bp, but the big surprise was the U.K. cutting a shocking 150bp. This may have been warranted, but I think it sent a bit of panic through the market as it highlights just how bad things are out there. I think this sends a signal to the market that Inflation is on the back burner and that getting growth started again is the main objective. I still here other EM traders i my room talk about inflation and how the Latin American countries need to raise rates (Mexico and Brazil). I think they are all smoking crack. Rates may not go down but there is no way they are going up (famous last words). I am staying with my receiving position and will look for a new opportunity to sell dollars.

Good Luck and Good Currency Trading.



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