Elimination of OTC Forex?

Now that this bill is law, I bet the brokers are going nuts today. The blogs are going crazy with this news. You can be sure that the CFTC will get a ton of complaints from the brokers. I cannot imagine that the retail Forex market will be shut down for the retail trader who has no Series 3 or 34 license. But here is the most popular blog content on the Internet today.

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Effective 90 days from its inception, the Dodd-Frank Act bans most retail OTC forex transactions. Section 742(c) of the Act states as follows:

“…A person [which includes companies] shall not offer to, or enter into with, a person that is not an eligible contract participant, any agreement, contract, or transaction in foreign currency except pursuant to a rule or regulation of a Federal regulatory agency allowing the agreement, contract, or transaction under such terms and conditions as the Federal regulatory agency shall prescribe…”

This provision will not come into effect, however, if the CFTC or another eligible federal body issues guidelines relating to the regulation of foreign currency within 90 days of its enactment. Registrants and the public are currently being encouraged by the CFTC to provide insight into how the Act should be enforced. See CFTC Rulemakings regarding OTC Derivatives located at the following website address, under Section XX – Foreign Currency (Retail Off Exchange). As this provision is potentially devastating to the forex industry, affected readers are encouraged to voice their opinions to the CFTC directly. To do so commentary should be forwarded to via email to:

Secretary@cftc.gov
Attn: David A. Stawick, Secretary
Commodity Futures Trading Commission
Three Lafayette Center
1155 21st Street, NW
Washington, DC 20581

More Euro Instability Due This Week

Today’s Financial Times reports that “Banks across the eurozone, but in Spain in particular, have found it hard in recent weeks to secure liquid funding in the commercial markets, with inter-bank funding virtually non-existent.”

Effective tomorrow the ECB will no longer give 12 month loans to Spain, but will only give 90 day loans.  International capital markets are now closed to most spanish banks and businesses. so the crisis continues as expected.

See full articles at:

• Financial Times
• Business Week

Here We Go Again – Is Japan Next?

Naoto Kan, Japan’s new Prime Minister while making his first speech to parliament last week said that “Our public finances have become the worst of any developed country.”

Japan’s public debt stood at 218% of gross domestic product last year, according to the International Monetary Fund – the highest in the industrialised world.

See a full report at Guardian.co.uk

As speeches are made, policies debated and bonds are sold, the market turbulence continues and almost every technical trading system benefits.

Now we can count on the Yen to move on its own to help our overnight ‘sleeper’ trades.

What a great summer is shaping up….This is almost as good as vacation.

Maybe we should call it TradeCation!!

Euro Instability To Grow This Week?

Spanish civil servants have now gone on strike, which is threatening to disrupt government functions. This is not surprising, but, as we trade the Forex today, we are expecting political comments from european leaders to affect the market.

Comments from the financial sector regarding bond ratings for Spain, and comments from spanish officials can move the Euro in the days ahead.

We are looking for any technical signs that smart money is, once again, moving away from the Euro, so we can follow the Euro down to its next support level.

See full article at cnn.com

See our earlier posts for reference at EuoDooTrading website.

Non-Farm Payroll will determine Forex risk

Today’s Non-Farm Payroll announcement should be very telling as to the tone of the market for the month. No question that the “NFP” is the most volatile of all announcements in forex.

Let me just say that I will be sitting on the sidelines waiting to see how the numbers reflect on job growth, especially in the private sector, and I will not be alone as it referenced in this Wall Street Journal article.

The private sector numbers are the key to this report, and will determine if the market is going to “risk on” or “risk off”. The last two months the numbers have been decent and have even seen revisions increasing the new jobs returned to the market. However, there are a couple of keys to those numbers that have still put us in a “risk off” position.
1. Many of the jobs gained were temporary as the US government was hiring for census counts etc.
2. Many people had left the job market, giving up for the midterm in looking for a job.

These two events caused the numbers to “look” a bit better than they actually were and the underlying current kept risk to a minimum.

Now we come to the May numbers. What is expected? Many are looking for a job number of 500,000 and yesterday in a memo sent to their clients reportedly Goldman Sachs is calling for 600,000 new jobs. Those numbers sound appealing and they are a step in the right direction but the underlying theme could be very mixed. Two key questions will emerge: Will the actual unemployment number drop or will in continue to climb? Many are expecting a drop of only .1%. The second and maybe the most important question. How many of the new jobs will be in the private sector?

The unemployment rate could have such a small move because many of the people that have been unemployed may actually begin looking for jobs again which would offset the number of new jobs found. Jobs that are created by the US government add to the overall market but they are not created equal to private sector jobs. Jobs created in the private sector reflect better economic growth and stability in the long term rebound from this recession.

So play it safe, don’t try to guess the market move, but prepare yourself for the market as this could set up a move over the next couple of weeks.

TraderCisco

HUGE SHORT CALL – ALERT FOR FOREX DAY TRADERS

Morgan Stanley is bearish on the Pound because of the election results and because of the wolf-pack that might attack Britain next.

They have a 1.3500 target for the Gbp/Usd.

To read the article Click Here.

FOOD INFLATION SPIRALING OUT OF CONTROL – BUT WE DON’T CARE

MarketSkeptics.com reported last Friday that U.S. fresh food prices have increased 56% in the past 12 months. The increase during the past month is the largest in over 26 years.

The Retail Sector will be the next to experience inflation as the gov’t increases its debt.

Their report states that “The U.S. government is now paying out more to Americans in benefits than it collects in taxes.”

They reported that the February 3.85% increase in retail sales (year over year) that was hailed as such a good number was so good only because of the increase in food and gasoline prices during the same period, which were 58% of the increase. So, more stuff was not purchased, just more dollars for the same stuff. That does nothing for productivity and job creation.

We are pleased to report that many of our friends are offsetting these price increases with the profits gained while trading the Forex with Tim Chandler. Tim’s daily webcast continues to assist with the identification of good market entries and continues to amaze the retail traders in the chat room.

If you have not yet tried it out, then you are missing a real financial benefit.

Check out the testimonials at http://www.investimonials.com/search.aspx?phrase=Tim+Chandlers+Trading+Room
Hey, U.S. Government, “Bring It On!”

WHEN IS 61 BILLION NOT ENOUGH?

Answer: When bailing out Greece.

Yesterday one of the German Central Bank Governors said that the amount needed might be 80 Billion.

We keep trading the Euro/Dollar Down with wonderful results, and the best might be yet to come.

See the full article here http://www.bloomberg.com/apps/news?pid=20601100&sid=a4Bm6ypa.pNw

J.P. Morgan and Silver – Reads like a spy novel

Is JPM manipulating the price of silver? This article is a “must read.”

Here is an sample para. “In summary, Ted Butler has proven that JP Morgan holds a very large concentrated short position in Silver on the COMEX futures exchange. He thinks they’re using this large, concentrated short position to intentionally manipulate the market, but he can’t prove that point conclusively. Up until the CFTC hearing, Butler was working from circumstantial evidence only. It wasn’t until Andrew Maguire arrived on the scene that evidence would be presented corroborating Butler’s suspicions.” Shortly after the hearing “whistle-blower” Andrew Maquire was killed in a hit and run car accident. Now have we got your attention?

Silver Forex symbol is XAGUSD

Full article is found here http://financialsense.com/editorials/townsend/2010/0419.html

Australia Interest Rate Change

On April 6 the Australia Central Bank increased their interest rate from 4.00 to 4.25 percent. We see this as very good news as this is the 1st of the G20 to raise rates twice this year. Read the full article from Bloomberg here http://www.bloomberg.com/apps/news?pid=20601087&sid=avGEyILkIV1g&pos=5

This will increase the volume of overnight transactions on the AudUsd, EurAud and AudJpy resulting in more consistent moves each day.

When money moves for the overnight interest, it makes the Tokyo session more volatile.

Any good success stories on Tokyo session trading?

We want to hear about them.