Forex rebates on every trade - win or lose!

I was trying to get my head around that when I read about the Barclays thingie this morning, but my eyes glazed over. Bearing in mind that this is the biggie that's spurred the markets this afternoon, here's a link to an article by the lovely Kathy Lien.

The bit that interested me in the Retrograph is: "Negotiations are at a preliminary stage and are believed to have been initiated by ABN chief executive Rijkman Groenink after considerable shareholder pressure, prompted by the bank's underperformance."

So which party is the target?

Choccie,

With the way that it was being puffed up yesterday, you'd have thought that it was just a case of crossing the T's and dotting the I's. The announcement this morning will do naff all to dent sterling.

BARC may well just be a stalking horse to bring others onto the scene

[13:02 NEWS: China To Cut "Small Amount Of Reserves" - PBOC"s Zhou] London,
March 20.

[13:06 EUR/USD: China Reserve Comments Hitting USD] Boston, March 20. Comments
from Chinese central banker Zhou that they will sell a "small amount" of
reserves and won"t accumulate more is sending the greenback lower. Without
floating the Yuan and closing the Chinese trade surplus it is unclear how he
intends to accomplish this. EUR/USD has pushed up to 1.3305 as dealers await
further details. Offers are seen at 1.3315/25 but if there is meat behind the
headlines, 1.3365/70 could easily be overcome.

Issue Date: 18 March 2007
The Rhodes Report


REVIEWING THE "YEN-CARRY TRADE"


The recent focus of the equity markets is upon the "sub-prime" mortgage
problem; and upon the "yen-carry trade". We think both are valid concerns;
however, the question of the "yen-carry trade" is more important in our mind
than the "sub-prime implosion." Perhaps the sub-prime problem is the "catalyst" to start the correction ball rolling, while the "yen-carry" is the horse that does the heavy-pulling, and the heavy-pulling in this regard is a correction that takes stocks back to more traditional oversold levels.

That said, looking at the Yen-S&P 500 ratio, we find two clear periods in the past decade - one short and one long - where the yen rose against the S&P. And in both cases, when the yen was rising against the S&P 500, the S&P 500 was in an absolute correction. The first period was short, and coincided with the 1998 Russian currency crisis, which took the S&P lower by -22%; whereas the second period was more prolonged and coincided with the technology "bubble". The result was quite a larger bear market with the S&P dropping 50%. Thus there is precedent for a larger decline coincident with a rising ratio.

Hence we must be concerned given the ratio is starting to show nascent signs
of wanting to rally once again. The initial "spike higher", coupled with the
oversold 40-week stochastic certainly concerns us. Moreover, the yen is right upon its 80-week trading moving average, of which a break above it would be the first time it has closed above it since 2005. Obviously, this would usher in higher yen prices. So, we think the ratio rally continues, and we clearly believe stocks will falter.

And in ending, this begs the question as to just how "deep" a correction are we looking at. If we simply look at the weekly and monthly S&P charts, we find major weekly support crosses at 1330...or its 80-week moving average. Monthly support however, is at the 40-month moving average, which crosses at 1230. Therefore, we think it would be rather reasonable for a test of this zone to occur; of which the total decline off the high would be roughly -9% and -16% respectively. Normal corrections on the order of -10% are common; hence we are willing to split the zone difference leaving our target at roughly S&P 1280. Obviously, this means are are selling rallies.

Fed decision
What's the consensus guys and gals - up down or no change ?

No change is my guess.

Yep ;)

Fireworks if it's down.

Thank you very much mightymicrochocipopsical the musical.

And what's yours meggerfeller?

the megnificant seven

[17:05 US FED: Preview of the FOMC Statement] Boston, March 21. Recent
indicators have suggested somewhat slower economic growth and the tentative
signs of stabilization in the housing market have largely faded. Still, the Fed
is apt to acknowledge that the economy overall seems likely to expand at a
moderate pace over coming quarters.
Favorable readings on core inflation deteriorated since the last FOMC
meeting and inflation pressures seem unlikely to moderate as quickly as
previously reckoned (i.e., before the June 2007 meeting). Similarly, the high
level of resource utilization (of both labor and capital) has the potential to
sustain inflation pressures.
The Committee should dutifully note that inflation risks remain. The
breakeven inflation rate rose to 2.36% at the end of February, the highest since
September. The Committee should, however, give at least a tip of the cap to
weakness in housing creation and turnover. While these are ostensibly
offsetting forces, the heft of accelerating inflation data at home and abroad
should keep the balance of risks tilted toward tightening.
Starting with a 9% overnight meltdown in China's equities on February 27,
then a crisis of confidence in sub-prime lending, different markets globally
have adopted and then passed on their bias of pessimism. We don't think the
baton ever landed at the Fed, though the sub-prime woes put it within their
reach. The March 7 Beige Book suggested few segments of the economy were steeped
in gloom. On data since, the unemployment rate headed lower to a tight 4.5%,
industrial production firmed to its long-term average and ULC, PPI and CPI
growth accelerated. Meanwhile housing, GDP and productivity turned lower. A
mixed expansion suggests a mixed policy statement but we think the Fed will
preserve its tightening bias through Jun.
Household spending (we favor services PCE) remains durable enough to support
the expansion and suggests the Fed can safely maintain the pause for ninth
month, if not for a 12 full months and perhaps beyond. So far, the pause has
lasted 265 days. At the close of the last expansion, the Fed waited 232 days to
lower the funds rate by 50 bps to 5.50%. We maintain that the Fed's next move
is an ease (25 bps in Q3), but not due to fears of a weakening economy. Rather,
such would come as inflation readings moderate to the point where they reveal
the funds rate is above neutral. That's already postponed so now we think the
first ease occurs later in Q3 instead of at the June 27-28 meeting or the August
7 meeting.
Recall, Susan Schmidt Bies will not vote at today's meeting and her
departure on March 30 leaves two governor seats vacant. There is an average of
6.1 years of service among current FOMC members, with only 2.2 years (average)
experience among Fed governors and 10.5 years average service among currently
voting Fed presidents. Poole, Moskow and Minehan have all announced intentions
to step down in 2007 which will further skew the Committee toward (voting)
inexperience.

Thank you Sir Edmund of Everest.

Fortunately I was sitting on a USD/JPY short when the FOMC announced - which was nice. Target is 11600 or thereabouts.

Hi Meggers

Pretty much with you on this one. Following a good start to last week to the USD/JPY last week I made a couple of poor reversal decisions, both of which cost a lot of pips, although less than the previous profit.

Moral of story - have courage of convictions and stick with the original plan.

My target is somewhat lower than yours though - 11500.

Hvae been waiting for an entry level, which looks like it will soon be here. The two hr MACD has crossed down and once it breaks below my support line at 11735, I'll be shorting again.

Switched back over to Cable yesterday evening and arrived home from golf just in time to catch the FOMC and +50 pips, although as always made harder work of the whole thing by trading in and out, rather than just leaving the first trade open.

pt instructor
Welcome home old chap - been playing with USD/JPY since Sir Edmund pointed me in the direction. Had some crap trades early on but getting the swing of it now. Decided I'd spend a couple of months playing with this to add to cable game.

Not been posting quite as much but still watching - and noticed your re-entry to the fray - looks like good stuff so far - keep it up chap - as the actrss kept on telling the Bishop.

Meg Ryan's Loverat

Thanks meggers, it certainly aint easy though. Just as I waas posting, it dropped through my line (just) so back in on the shorting trail once more (USD/JPY). Where it goes, nobody knows, but it had better be down :)

And then it went back up :( Patience, patience.

Had a quick short on Cable for +6. Must admit I have difficulty in leaving a trade open when I am sat at the screen and seem to prefer nipping in and out for quick trades and try to build a decent stack of pips that way. Everytime I leave a trade and go out, it seems I miss my target by a few pips and am either back to square one or stopped out. I guess we all discover our trading styles in the fullness of time.

And then it went back up :( Patience, patience.

Had a quick short on Cable for +6. Must admit I have difficulty in leaving a trade open when I am sat at the screen and seem to prefer nipping in and out for quick trades and try to build a decent stack of pips that way. Everytime I leave a trade and go out, it seems I miss my target by a few pips and am either back to square one or stopped out. I guess we all discover our trading styles in the fullness of time.

pt instructor
Could I recommend Zen And The Art Of Forex Trading - won't mean you'll improve your trading but at least you will be doing it on a different astral plane 8-X

Mystic Meg