FX

European Central Bank President Mario Draghi signaled the bank has no intention of tightening monetary policy anytime soon with inflation projected to “significantly” undershoot its 2 percent target next year - Bloomberg Royal Bank of Scotland (RBS) has reported its fifth annual loss since it was rescued by the government in 2008. Pre-tax loss of £5.16bn includes past conduct charges of £1.1bn for PPI settlements, £700m for interest rate swaps and a £…

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The foreign exchange (FX) market is decentralised and predominantly executed over-the-counter (OTC). In the majority of spot FX positions, the trader is required to take delivery of his currency T+2 (settlement two days after the transaction date). However if a trader doesn’t want to take delivery of his position, then it is “rolled” into the next day. This occurs each day at 5pm ET (New York) and the positions are effectively closed and then reopened for the next trading d…

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Foreign Exchange Direct Market Access (DMA) Originally the majority of retail traders were unable to access the direct underlying market due to the size and frequency of their trades. Trading was originally restricted to banks, inter-dealer brokers, hedge funds and local (proprietary) traders. The OTC market is based on bilateral credit lines between institutions, which have counterparty risk. As technology has advanced, electronic screen based trading and opened up trading to t…

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Bank of Japan has pledged to Fed style open-ended asset purchases, with the Yen and Nkkei easing following BOJ announcement, as traders had bought the rumour and sold the fact Fresh data from the Bundesbank show that Anglo-German trade in goods and services soared to €153bn in the first nine months of 2012 - Telegraph S&P affirmed Portugal's BB rating, while the outlook remains negative Japan’s Economic Minister Amari said that the government has no inten…

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Christmas is under a week away, and the New Year isn’t far. Until the 2nd of January, with many traders likely to close or cover positions over the holiday period and be away from their desks, liquidity from Monday the 24th December until the 2nd of January should be relatively thin. Some analysts have been putting the dollar weakness down to fund managers squaring positions ahead of month end and year end. Cable is trading at the highest price since mid-September, and EURUSD tra…

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The US Presidential election is in its final day of campaigning, postal votes are in and ballot votes will be done tomorrow. Considering I live in London, and haven’t visited the US since the campaigning began, somehow I feel overwhelmed by coverage. I watched the last election with an American friend and it was a milestone for US politics to elect Barack Obama. His term in office can be summed up in one quote of a previous US President“It’s the economy, stupid” (Bill…

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Regulator warns on big four accountancy firms alumni, contributing to stifling competition -Financial Times Libor is currently being set by a smaller group of banks (Bank of America, Citigroup, Bank of Tokyo Mitsubishi UFJ, Royal Bank of Canada, Sumitomo Mitsui Financial Group and Lloyds Banking Group) impairing the rate further –Bloomberg George Osborne Chancellor of the Exchequer will find out the full list of candidates to replace Mervyn King from (I assume Bob Diamond w…

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If you live in the western world, then unless you have been living under a rock, you will know what Facebook is and hear colleagues, friends and children discuss it on a near daily basis. For many it is a part of their daily routine of logging in to Facebook to check updates and pictures from their friends. If you have somehow not come across the social media platform, then Facebook was a social experiment setup in Mark Zuckerberg's dorm room, which has grown to have over 1 billion users…

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Analysts and traders have been eyeing the slowdown of China as the source of the next financial crisis for many years. The Chinese economy has grown at envious levels to all in the west for well over a decade. As the western economies have gone into melt down, China has continued to demand raw materials, at an unprecedented level and produced low costs goods, with its cheap labour force. The PBOC has come under criticism for holding the exchange rate artificially low to remain competit…

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Overnight Asian markets fell as investors showed concern over central bank stimulus from the EU, Asia and the US, will not be enough to increase global growth. Benchmark indices across Asia fell with the MSCI Asia Pacific Index down around 1.5%. The Chinese economy has fuelled global demand through imports of raw materials for development and exports of cheap goods from low cost labour. Analysts are concerned that a Chinese hard landing could be the sucker punch to global growth over the nex…

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It’s the final trading session of the week in Europe and if you are one of the Apple faithful then you might have been queuing outside an Apple store overnight awaiting the iPhone 5 release. With pre orders topping $2 million, Apple has already released a statement stating that some clients will be unable to purchase the new smart phone until the end of October. It is a problem, that many companies would love to have, being unable to meet the demand upon release of a new product, with…

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During the Asian session equities fell the most in two weeks after the release of Chinese manufacturing data, showing that its manufacturing sector is likely to contract in September for an 11th month. The Asian selloff continued after the release of Japanese exports down by 5.8% from August compared to the previous year. This week has seen WTI Crude fall by nearly $10 from high to low currently trading with a $90 handle trading at a 6-week low. This follows the sudden selloff on Monda…

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Equity markets rallied yesterday after the expected announcement by Mario Draghi that the European Central Bank (ECB) will indeed be supporting indebted European governments. He pledged the ECB will consider to purchasing their government bonds in a new programme dubbed Outright Monetary Transactions. These would be bought in the secondary market, and not indirectly from the governments and Draghi stipulated that this would only happen after the governments had sought financial aid from the…

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The pace of growth in the Australian economy seems to have slowed. GDP data released overnight showed that economy grew 0.6% QoQ (Q2) compared to the more impressive 1.4% in Q1. The main contributing factor seemed to be the mining sector, down 1.4%. Perhaps this is due to other mitigating factors, though analysts are likely to point to the connection between the slowing of Chinese demand and Australian mining supply. Anticipation for the next iPhone release is underway as Apple…

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The weekend’s financial press were awash with articles discussing Chairman of the Federal Reserve Ben Bernanke’s Jackson Hole speech on Friday. Bernanke’s comments were sufficiently dovish, and led US equity markets to close with gains on Friday, with Gold and Silver benefiting from the prospect of QE3. The official China PMI for August was released on Saturday while the markets were closed, and printed a week figure of 49.2, below the pivotal 50.0 expansion le…

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