For the past 3 years, the talk was the sub-prime crisis…Now it seems the new fascination in the financial press is the dollar-carry trade, which is exciting because it gives the TV analysts something new to wring their hands over and explain to it viewers.
Basically for a long time we had a yen carry trade, which speculators used the yen as currency of choice to borrow and use to trade with. That activity still exits, however, with the dollar being liquefied during the last year, the us dollar became a more attractive (cheaper) alternative…So now as currency fluctuations do their thing, it impacts the speculators, which impacts the volatility of their “investments” that being what ever the speculators are trading, IE corn ,wheat, beans, stock indexes, you name it…
So that should be something for you to educate yourselves about as it impacts trade.
On that note, the bearish news of the day will be the banking issues in the UK, where banks asked for another 32 billion to shore up their system.
That will be digested through out the day, and again, will give us more volatility.
Expect that volatility to extend through the rest of the markets as well…Grains should be all over the place as well.
Good Trading