The dollar is soft across the board as it has been giving back some of its gains of late. That said, even a 1% jump in cable is still unheard of with prices hovering above 1.0800 on the day. Elsewhere, the dollar spot in USD/JPY was down 0.3%, but still around 144.30 and close to a run against the 145.00 level – where Japanese authorities intervened last week for the first time since 1998.
The euro remains in rough territory above $0.9600 as traders start to get used to the currency’s bearish outlook. In terms of commodity funds, the greenback is losing some ground but in the context of last week’s moves; tis but scratch.
One day won’t make a difference, but as month-end trading approaches, there’s probably room for a slight correction in the dollar’s run, and that could lead to broader market sentiment stalling in the coming days.
Looking at equities, U.S. futures are currently the best, with S&P 500 futures up 42 points, or 1.1%, after yesterday’s decline. But perhaps the biggest nudge for the broader markets is that bonds have been able to stop the loss for the time being.
The 10-year gilt yield fell 11 bps to 4.12%; The 10-year Treasury yield fell by 4.5bps to 3.835% and in my view that will allow markets to breathe a sigh of relief today. This does not mean that things are getting better or that the dark clouds are clearing.
We are at the stage where we are Flexibility
Flexibility
From a business perspective, volatility refers to the rate of change in an index or asset, such as forex, commodities, stocks, over a period of time. Trading volatility can be a way to describe instrument volatility. For example, a highly volatile stock equates to greater price volatility, while a less volatile stock equates to greater price volatility. In general, volatility is an important statistical indicator used by many parties, including financial traders, analysts, and brokers. Volatility can be a critical factor in developing trading systems, protocols, or rules. In the retail space, traders can be successful in both low and high volatility environments, but the strategies employed differ depending on the volatility. Is flexibility good or bad? In the forex space, low levels of volatility in currency pairs offer little surprises, movements, and suit certain individuals such as position traders. Additionally, high volatility pairs are attractive to multi-day traders. This is due to fast and strong movements, which together offer the possibility of high profits. However, the risk associated with such dynamic pairs is high. Note, volatility on instruments or indices can and do change over time. There may be times when even the most flexible devices show signs of flatness, the price is not really attractive in either direction. For example, certain months in summer are associated with low trading volatility. Too little volatility is just too much trouble for the markets. Too much volatility can create panic and create its own issues, such as liquidity constraints. A famous example of this is the black swan events that have historically disrupted currency and equity markets.
From a business perspective, volatility refers to the rate of change in an index or asset, such as forex, commodities, stocks, over a period of time. Trading volatility can be a way to describe instrument volatility. For example, a highly volatile stock equates to greater price volatility, while a less volatile stock equates to greater price volatility. In general, volatility is an important statistical indicator used by many parties, including financial traders, analysts, and brokers. Volatility can be a critical factor in developing trading systems, protocols, or rules. In the retail space, traders can be successful in both low and high volatility environments, but the strategies employed differ depending on the volatility. Is flexibility good or bad? In the forex space, low levels of volatility in currency pairs offer little surprises, movements, and suit certain individuals such as position traders. Additionally, high volatility pairs are attractive to multi-day traders. This is due to fast and strong movements, which together offer the possibility of high profits. However, the risk associated with such dynamic pairs is high. Note, volatility on instruments or indices can and do change over time. There may be times when even the most flexible devices show signs of flatness, the price is not really attractive in either direction. For example, certain months in summer are associated with low trading volatility. Too little volatility is just too much trouble for the markets. Too much volatility can create panic and create its own issues, such as liquidity constraints. A famous example of this is the black swan events that have historically disrupted currency and equity markets.
Read this word It’s too high and there are probably (or are) serious financial problems going on. The global bond market is worth more than 1/5 this year alone, with a large portion of that going long on the dollar, which is the only game in town this year.
Even the bond market is acting in focus, which is a big red flag for risk in particular assets and reason enough for the reaction we’ve seen in the broader markets this year – especially in the last few weeks.
These charts from @biancoresearch paint a grim picture of the bond market at this point in terms of historical times.