Forex rebates on every trade - win or lose!

I was happy to get out with +30 it sets me up B/E for the week so far too..

Whats the volume like over X-Mas normally?

I remember last year X-mas eve was a 3pip range for the day but how do the other days hold up?

Well, after a fired long on Friday @ 19050 - took my 100 points yesterday and then reverted to playing the arse - whipped about like a feather in the wind.

Hopefully, today's effort will prove a little less disastrous. Went short @260 and again @ 240 - based on a break of the lower reaches of the 15, 30 and 60 minute up-trend channels from Friday.

Tight stops in place so I'm hoping it drops a bit before getting all tied up in the FED effect.

Good Luck mg..

Im out myself until tomorrow now..

Thought this might be worth pinning up on the wall every month..

http://www.scotiacapital.com/English/bns_econ/calendar.pdf

Is the Japenese Core Intrest Rate Above Corect? 0.001 ?

I think it's probably more like 0.000000000001%, T, but that wouldn't fit into the little box in the header.

:o)

Well that was a damp squib

T,

Joking aside, I'm not really sure what the Japanese core interest rate is. I originally got those figures and symbols from FX Street. However I can't seem to find them now, although I have found this table on FX Street which says that rates have been at 0.1% since Sept '01. I'm confused and your guess is probably as good as mine as to their proper value. Regardless, they're pretty close to zero.

Major Central Banks Overview
Central Bank Next Meeting Likely Change Last Change Current Interest Rate
FED (Federal Reserve) 14 Dec. 2004 Eventual increase 10-Nov-04 2.00%
BOJ (Bank of Japan) 18/19 Jan. 2005 No rate change expected 19-Sep-01 0.10%
ECB (European Central Bank) 13 Jan. 2005 No rate change expected 5-June-03 2.00%
BOE (Bank of England) 12/13 Jan. 2005 Eventual increase 05-Aug-04 4.75%
BOC (Bank of Canada) 25 Jan. 2005 Eventual increase 19-Oct-04 2.50%
SNB (Swiss National Bank) 27/28 Jan. 2005 No rate change expected 16-Sep-04 0.25/1.25%
Riksbank (Sweden Central Bank) 17 Mar. 2005 No rate change 01-Apr-04 2.00%
RBA (Reserve Bank of Australia) 1/2 Feb.. 2005 Likely rate increase 03-Dec-03 5.25%

More statistics..


The Latest Flow-of-Funds Data: What Happens If/When Foreigners Stop Buying? - Dec. 13, 2004

--------------------------------------------------------------------------------


Foreword

If you are reading this article as a visitor to the website, thank you! While here, be sure to visit the site's home page. And if you like what you see, be sure to sign up for a free trial subscription . -- Doug Gillespie

_____


Summary

A closer look at the latest Federal Reserve flow-of-funds data reveals some exceptional happenings during the third quarter. For those people wondering why open-market interest rates in the United States have remained so subdued in the face of growing inflationary pressures that are now unmistakable, this third-quarter data provides at least some answer.
_____

Introduction

Last Thursday, the Federal Reserve released its latest "Z.1," also known as the "Flow of Funds Accounts of the United States." I quickly lifted and published tables containing the foreign-related data I do each quarter. In my view, speed was particularly important with this task this time around, within the context of the missive I published on 11/27. That article was entitled, "Dollar Weakness and Its Threat to the US Financial Markets."

When I wrote the November piece, the latest flow-of-funds data that existed were through the June quarter. I went ahead using those numbers anyway, since the accelerating decline taking place in the dollar's exchange-rate value had several of my clients inquiring about just how serious the implications were. My terse answer was, "potentially, very serious." After all, although lots of investors did not realize it at the time, or have since forgotten, 1987's stock-market crash had its genesis in a dollar decline.

So now that the Federal Reserve has made available the latest numbers (released on 12/9 with data through 9/30), it's important to see how this might all fit with market events of the last few months, as well as with possible developments in the months ahead.
_____

Some Numbers

* As of 9/30/04, foreign investors held a total of $8.925 trillion of US financial assets, up almost $121 billion from revised holdings of $8.804 trillion as of 6/30. From 9/30/03, the increase was approximately $1.091 trillion. (See Table 1 in the table appendix at the end of the text.)

* As of 9/30, foreign liabilities totaled about $4.410 trillion, resulting in a net foreign claim against the US of more than $4.515 trillion. (See Table 1.)

* The dollar's exchange-rate value put in a major bottom in the spring of 1995, commencing a steep rise into early 2002. Note in Table 1 how the expansion in the growth of foreign holdings of US financial assets paralleled the dollar's rise.

* As Table 1 indicates, the United States, for the first time since World War II years, became a net debtor during 1985.

* Table 2 segregates the classes of capital-market assets that are readily salable by foreigners, or where a significant slowing in the rate of accumulation could adversely influence domestic prices. As of 9/30, these totaled $6.101 trillion, which was a very healthy 68.4% of total US financial assets held by foreigners. This illustrates the sizable exposure US markets would have to any substantial net reduction in these holdings.

* As of 9/30, foreign investors held the following respective percentages of total outstandings of Treasuries, agencies, US corporate bonds and US equities: 43.5%, 12.2%, 26.1% and 12.3%. Combined holdings of Treasuries and agencies were 24.9% of total outstandings.

By comparison, going back to 12/31/94, not long before the dollar put in the major bottom mentioned above, foreigners held the following respective percentages of total outstandings of Treasuries, agencies, US corporate bonds and US equities: 18.3%, 5.7%, 13.4% and 7.0%. At that time, the combined holdings of Treasuries and agencies were 13.4% of total outstandings.

* As of 9/30, the 15 largest foreign holders of US Treasury debt had total holdings of $1.584 trillion, an increase of more than $66 billion or 4.4% from 6/30. (These figures include both "official" and "private" holdings. See Table 3.)

Tables 1 through 3 in the appendix break out foreign holdings of US financial assets as of the end of given periods. These are dollar values outstanding at the end of those periods. On the other hand, Table 4 breaks out the net foreign flows into the markets during the periods shown. Figures for 2004's third quarter are at annual rates, which makes them comparable to the data for 2000 through 2003, inclusive.

* During 2003, a very high 73.6% of US financial-asset acquisition by foreign investors was in highly marketable (therefore, highly "salable") asset classes. This shows not only the positive influence that well over half a trillion dollars had on our domestic markets as the money was going into them, but also the opposite effect it could have, were there to be even a sizable decline in the magnitude of the flows. Of course, were there to be net liquidatioins, the situation would likely be far worse.

* During this year's third quarter, financial-asset acquisition by foreigners rose to an annual rate of an exceptionally large $1.111 trillion, although the amount that went into the highly marketable asset classes I've segregated slipped to 68.5%.

* The following statistics illustrate the degree to which foreign capital flows have supported US markets. During the September quarter, foreigners absorbed the equivalent of an extraordinary 97.7% of all Treasury issuance, an even more extraordinary 99.9% of all agency issuance, and 63% of all corporate bond issuance. Combined foreign purchases of Treasuries and agencies came in at an annual rate of $369.3 billion, which equaled almost 99% of total Treasury and agency issuance during the third quarter.

* A final point about Treasury activity during the September quarter. In addition to the huge proportion of foreign acquisitions, the Federal Reserve increased its own portfolio of Treauries during the period at an annual rate of $74.1 billion. This means that during the quarter, the Fed and foreign investors absorbed $278.2 billion (annual rate), versus total issuance at an annual rate of $208.9 billion. Obviously, this had a very favorable influence on Treausry yields during the quarter, although an influence certainly lacking in its "free-market" characteristics.
_____

Table Appendix
Table 1.
------------------------------------------
FOREIGNERS' U.S. FINANCIAL
ASSETS/LIABILITIES
(Billions of Dollars, Latest Data
Released 12/09/04 Through 09/30/04)
------------------------------------------
Total Total
Financial Financial
Assets Liabilities Difference
------------------------------------------
2004
09/30 8924.9 4409.5 4515.4
06/30 8804.0 4235.8 4568.2
03/31 8644.4 4144.7 4499.7
------------------------------------------
As of
12/31
-----
2003 8228.7 4050.1 4178.6
2002 7441.1 3981.8 3459.3
2001 6965.8 3650.1 3315.7
2000 6584.9 3490.2 3094.7
=======================================
1990 1998.4 1388.8 609.6
---------------------------------------
1985 967.4 869.7 +97.7
1984 805.3 841.6 -36.3
---------------------------------------
1980 494.2 666.4 -172.2
1970 104.8 140.5 -35.7
1960 38.9 63.5 -24.6
1950 17.4 31.4 -14.0
=======================================
1945 16.3 14.9 1.4
------------------------------------------
Source: "Flow of Funds Accounts
of the United States" (Federal
Reserve "Z.1" release).
------------------------------------------
Table 2.
-----------------------------------------------
FOREIGN HOLDINGS OF US FINANCIAL ASSETS
AS OF 09/30/04 (Billions of Dollars
-- Latest Data Released 12/09/04)
-----------------------------------------------
% of
Total
Total US Financial Assets -----
Held by Foreign Investors 8924.9 100.0
===============================================
Credit-Market Instruments# 4430.7 49.7
------ ----
Open Market Paper 115.3
US Govt. Securities 2616.7
Treasury 1856.1
Agency 760.6
US Corporate Bonds 1698.7
-----------------------------------------------
US Corporate Equities 1670.3 18.7
------ ----
Credit-Market Instr.
+ Corp. Equities 6101.0 68.4
====== ====
-----------------------------------------------
Detail of US Government Securities
-----------------------------------------------
Treasury 1856.1
Official 1162.1
Private 694.0
Agency 760.6
Official 208.7
Private 551.9
------
2616.7
======
-----------------------------------------------
Source: "Flow of Funds Accounts of the United
States" (Federal Reserve "Z.1" release.) #For
the purpose of this analysis, the category
"Loans to US Corporate Business" has been ex-
cluded. As of 9/30/04, this category had tot-
al outstandings of $121.7 billion.
-----------------------------------------------
Table 3.
----------------------------------------
15 LARGEST FOREIGN HOLDERS OF U.S.
TREASURY DEBT AS OF 09/30/04, VS. THE
SAME COUNTRIES' HOLDINGS AS OF 06/30/04
(Amounts in Billions of $s)*
----------------------------------------
09/30 06/30
Country 2004 2004
----------------------------------------
( 1) Japan 720.4 689.3
( 2) Mainland China 174.4 164.9
( 3) United Kingdom 134.6 126.5
( 4) Caribbean Bank-
ing Centers@ 100.3 85.8
( 5) Korea 66.6 60.5
( 6) Taiwan 57.4 57.7
( 7) Germany 51.0 47.7
( 8) Hong Kong 49.5 52.4
( 9) Switzerland 48.5 49.6
(10) OPEC 43.1 43.7
(11) Mexico 33.9 38.6
(12) Canada 33.8 30.6
(13) Luxembourg 26.7 26.4
(14) Singapore 24.1 27.0
(15) Ireland 19.4 16.7
----------------------------------------
Total 1583.7 1517.4
----------------------------------------
*Estimated end-of-period foreign
holdings of US Treasury marketable
and nonmarketable bills, bonds and
notes based on Treasury Foreign
Portfolio Investment Survey bench-
marks and on monthly data reported
under the Treasury International
Capital (TIC) reporting system.
Totals comprise both official and
private holdings. Data subject to
revision. @Includes Bahamas, Ber-
muda, Cayman Islands, Netherlands
Antilles, and Panama.
----------------------------------------
Table 4.
-----------------------------------------------------
NET ACQUISITION OF U.S. FINANCIAL ASSETS
BY FOREIGN INVESTORS -- 2000 TO 9/30/04*
(Billions of Dollar)
-----------------------------------------------------
Years Ended December 31
--------------------------
2000 2001 2002 2003 3Q04*
----- ----- ----- ----- ------
Net Acquisition
of Finan. Assets 963.0 657.7 741.3 783.0 1111.2
================= ===== ===== ===== ===== ======
Credit-Market
Instruments
----------------
Open-Mkt. Paper 4.3 -2.6 10.3 9.9 -0.8
Treasury Sec. -70.5 10.5 138.9 285.1 204.1
Agency Sec. 141.9 103.7 112.5 11.5 165.2
Corp. Bonds 168.4 195.4 151.0 232.6 370.9
----- ----- ----- ----- -----
Subtotal 244.1 305.4 412.7 539.1 739.4
----- ----- ----- ----- -----
Corp. Equities 193.6 121.5 54.2 36.9 22.3
----- ----- ----- ----- -----
Total 437.7 426.9 466.9 576.0 761.7
===== ===== ===== ===== =====
Above/Net Acquis. 45.5% 64.9% 63.0% 73.6% 68.5%
----- ----- ----- ----- -----
MEMO ITEM#
----------------
Loans to Corp-
orate Business -2.2 -1.6 10.1 -0.8 -26.0
-----------------------------------------------------
DISTRIBUTION OF TREASURY/AGENCY ACQUISITIONS
-----------------------------------------------------
Treasury Securities
-----------------------------------------------------
Official -5.2 33.7 60.5 169.7 125.1
Private -65.3 -23.2 78.5 115.4 79.0
---- ---- ----- ----- -----
Total -70.5 10.5 139.0 285.1 204.1
-----------------------------------------------------
Agency Securities
-----------------------------------------------------
Official 40.9 20.9 28.6 24.9 38.2
Private 101.0 82.8 83.9 -13.4 126.9
----- ----- ----- ----- -----
Total 141.9 103.7 112.5 11.5 165.1
-----------------------------------------------------
*Source: "Flow of Funds Accounts of the United
States" (Federal Reserve "Z.1" release). #Al-
though "Loans to Corporate Business" are classi-
fied by the Fed as "Capital Market Instruments,"
they have been excluded for the purpose of this
examination, since they lack the liquidity of
the other categories. 3Q04 figures are at
seasonally adjusted annual rates.
-----------------------------------------------------

Hil:

Always pleased to be of service . . .

I thought that you'd like that one, MM.

:o)

AUD Australian Skilled Vacancy Report 0:00 19:00
JPY Leading Economic Index (Oct F) 5:00 0:00 20.0%
JPY Coincident Index (Oct F) 5:00 0:00 11.1%
JPY Machine Tool Orders (YoY) (NOV F) 6:00 1:00 45.6%
GBP Unemployment Rate (NOV) 9:30 4:30 2.7% 2.7%
GBP Unemployment Change (000) (Nov) 9:30 4:30 -0.3K 0.9K
GBP Avg Earnings Incl Bonus (3M/YoY) (Oct) 9:30 4:30 4.0% 3.7%
GBP Avg Earnings Excl Bonus (3M/YoY) (Oct) 9:30 4:30 4.40% 4.3%
GBP ILO Unemployment Rate (3mths) (Oct) 9:30 4:30 4.6% 4.6%
GBP Manufacturing Unit Wage Cost (3M/YoY) (Oct) 9:30 4:30 0.2% 0.2%
EUR Euro-Zone Labor Costs (YoY) (3Q) 10:00 5:00 2.2% 2.1%
EUR ECB President Trichet Speaks
USD Empire Manufacturing (Dec) 13:30 9:00 20.10 19.76
USD TIC Data Net Foreign Security Purchase (billion) (Oct) 14:00 9:00 $63.4
JPY BoJ Monetary Policy Meeting (Dec 15-16)
GBP Leading Indicator Index (MoM) (Final) (Oct) 15:30 10:30 0.4%
GBP Coincident Indicator Index (MoM)(Oct) 15:30 10:30 0.20%
ITL Current Account (EURO) (OCT) -409.0M
USD NAHB Housing Market Index (Dec) 18:00 13:00 71 71

Thanks Hil..

Morning All

Long today IMO...

Strategy/Forecasts.. Sideways with a slight bias to an upside break out. Is pretty much the Jist of things..

Looking at euro, 50 is a good target based on the 30min channel..

GBP or EUR any thoughts?

It's probably not going to make a lot of difference which one you pick today, T. Why not try them both?

As you might have guessed I was stopped out of my positions yesterday - for -25 and -45. Not good because I watched it go to +50 and +30 and left them open.

I doubt, therefore, whether you will take any notice of my current view/positions. I'm short from 285 and 290 loonking for a repeat of the overnight fall to around the 200 mark.

My view is that the charts are looking very toppy - and rounded - suggesting that we may well be looking at a lower high for the - wait for it - daily - chart.

But please remember I'm new to cable and am trying to figure out what might pass as a reasonable (for me) strategy. I don't think rampant shorting would pass the "reasonable" test ;)

Saxo bank like upside for EURO/Pound
or short $/Swiss on North Korea histrionics.
I am long Euro via sb from about 3320 and considering trying another too

mg,

It depends upon the time frame of your trade and also the tightness of your stop, but it's generally dangerous to trade against the trend. Tellon and I are looking for a trade which will hopefully last from between 1 hour and 8 hours depending upon how well it goes. That trade this morning is short Dollar.

In a completely different type of trade (one which would last days or weeks) I had been long Dollar (short Cable to be precise) from last week but closed it out yesterday and reversed.

hilary
Thanks - agree about both timescale and trend. However, it does depend on what you "see". In charting terms I can "see" an upward sloping flag (on a downward moving chart) and a lower high forming.

I suppose it's not necessarily "what you see is what you get".

mg,

I can see exactly the same thing on the chart, other than that my interpration is that the "lower" high hasn't been given time to form yet and therefore might end up not being a lower high at all. I'd rather wait for confirmation of the high and for it to actually start coming down before looking for a short entry. That's just my style.

I can incidentally see the making of a fresh cable uptrend with rising support through the lows of Friday and yesterday.