Forex Managed Account Secure

[Forex Job] Head of FX at FXCM

mql4indonesia@gmail.com — Fri, 25 Nov 2011 16:04:00 +0000

Company
FXCM Ltd

Location
Scotland-Edinburgh

Remuneration
Competitive

Position Type
Permanent

Employment type
Full time

Updated
25-Nov-2011

eFC Ref no
929261

FXCM represents an excellent opportunity for an enthusiastic, entrepreneurially minded finance professional to run and build a foreign exchange business based in Edinburgh. The company is fully funded and is already trading.

It has a high quality, internet based IT platform linking with the market so the main driver required is bringing in clients and enabling them to use the platform. The right candidate will be significantly incentivised and should be able to build a sales team over time and a client list of significant value. The business operates alongside a very successful fixed income trading business and an FSA regulated fund administrator.

1. Key Job Deliverables/Responsibilities:
    • Identify, create and pursue new business opportunities in the corporate foreign exchange sector
    • Bring in new clients to the existing high quality platform
    • Once income-generating, build the business by recruiting a high quality sales team
    • Identify particular client types and sales strategies for those groups
    • Continue to nurture top clients to maintain business value

2. Job /Role Competencies:
    • Strong numeracy and communications skills to be able to present and negotiate with executive level positions within a prospective client company
    • Strong sales skills to persuade clients to join the platform
    • Competency to manage a sales team and the complete sales cycle process to ensure maximum productivity and completion of sales/pipeline reports and competitor information
    • Enthusiasm and motivation to build the business and create value

3. Previous Experience/Qualifications:
    • Experience in attracting new clients to a financial service
    • Direct foreign exchange experience useful but not essential
    • Proven track record in sales
    • Experience in building and managing a sales team

4. Regulatory Requirements of Role:
None

For more information click here

EU Summit relief rally may be short-lived

mql4indonesia@gmail.com — Sat, 29 Oct 2011 04:37:00 +0000

Image by Getty Images via @daylife

The Week Ahead

Highlights

EU Summit relief rally may be short-lived
USD under pressure on a number of fronts
G-20, FOMC, ECB and RBA meetings next week

EU Summit relief rally may be short-lived

As expected, EU leaders came up with a sufficiently credible plan to prevent a disorderly default of Greece, recapitalize EU banks, and increase the size of the EFSF in an attempt to quell contagion to other EU sovereign debt. Risk markets responded with a massive rally on what we think is over-exuberance, but also likely due to a huge squeeze on short-risk/long USD positions. The details of the EFSF expansion, the Greek debt swap and other mechanisms are still to be worked out over the coming weeks, but market sentiment over the package appears to be fading rather quickly.

No less of an authority than the new president of the Bundesbank, Jens Weidmann, has already called the EFSF expansion into question, telling a conference in Munich the plan is “not too different from those which were partly responsible for creating the crisis, because they concealed risks.” His comment hits at the critical issue behind the Eurozone debt crisis, namely that it's all about confidence and perception. If markets believe the plan is credible, then it may not even be needed. But if markets don't buy the notion that more borrowing will solve Italy's already over-extended debt, then even the expanded EFSF won't be sufficient. Ultimately, that comes down to growth prospects for the individual debtor nations, and there we think the prospects are daunting to say the least.

European credit markets appear to be already voting with their feet, as core-peripheral bond spreads have begun widening again after a mere 24-hour respite. Italian 10 year government bond yields are back over 6% and Spanish bond yields have reversed their declines from the post-summit euphoria. US Treasuries rallied on Friday on safe haven demand, sending 10-year yields lower by about 10 bps in a potential failure/rejection above the daily Ichimoku cloud. US stocks look to have stalled for the moment, with the S&P 500 possibly topping below the top of the 1290 weekly cloud/1300 psychological resistance levels. Across markets, the rebound in risk assets this past week basically ‘closed the gap' from the collapse that started in August (in stocks) and the surge in the USD that started in early September. While there has been some potentially serious technical damage done to the risk-off trade, we think we're more at a crossroads than a major turning point. We will be especially alert for indications that the risk rebound is reversing next week. We think the FOMC will need to deliver QE3 for gains to continue (see below for more).

Back to the EU debt crisis, in the weeks ahead we think there is likely to be a fair amount of cheerleading for the EU package, not the least from next Friday's G-20 meeting, and we expect several commitments of support from key potential investors, like China, Brazil, mid-east and other sovereign wealth funds; Japan has already signaled willingness to invest. We'll be watching the reaction of risk assets on those expected signs of support, and the less risk markets respond favorably, the greater our doubts about the sustainability of the rebound will grow. We will be especially alert to how markets trade to start the week, after a weekend spent digesting the full implications of what the EU has actually delivered.

USD under pressure on a number of fronts

The USD was hit hard this week, as long-USD positions were liquidated en masse. Apart from positioning, the USD is under pressure as risk markets rebounded, reducing safe-haven appeal of the buck and US Treasuries. We would also note that risk aversion remains in the background as seen by continued strong demand for the other FX safety valves, CHF and JPY. But the big driver by far of the current risk rebound/USD weakness are growing expectations that the Fed may deliver QE3 at the conclusion of next Wednesday's two day meeting (see more below). We would expect further USD weakness if the Fed delivers more QE, but it will depend on the size of the program. If the Fed abstains, the USD is more likely to bounce back. Lastly, we also think the USD is under pressure across the board on month-end portfolio re-balancing flows. Given the outsized gains in US stocks in particular, foreign investors have larger USD exposures and need to sell more USD to maintain hedging ratios. We would expect further USD weakness to start the week based on these flows, but that the selling pressure may culminate following the 11EDT fixing. If the USD shows resilience in early NY trading, it likely means markets have turned more risk averse on a reconsideration of the prospects of success of the EU debt plan and USD-demand is swamping asset manager USD-supply.

The USD index has dropped to finish the past week just above the 75.00 level, holding above the 76.4% retracement (75.01) of the late August rally to just below 80.00. In EUR/USD, that level equates to 1.4220/50 as the key hurdle to further gains. In AUD/USD, August highs at 1.0765 are the equivalent pivot to fresh upside. Gold prices have recovered as the USD has weakened and are currently testing the daily cloud between 1747/1756; price looks like it should open next week above the cloud top, which falls to 1727/26. However, be alert for a failure and daily close back below. Friday's price action across most major USD-pairs also resulted in numerous small real bodies (doji and spinning tops) on daily candle sticks, an indication of uncertainty following Thursday's huge rally/USD sell-off. This keeps us alert for a potential USD reversal, but mostly we expect further consolidation ahead of the FOMC.

G-20, FOMC, ECB and RBA meetings next week

The G-20 will gather in Cannes, France on Thursday and Friday next week. We expect the group to show solidarity with the Eurozone and endorse the EU debt plan. We would also look for signs of cash-flush members indicating at least a strong willingness to consider investing in the EFSF and related vehicles, though firm commitments will likely need to wait until all the details are worked out.

On Wednesday, Nov. 2, the Fed is expected to maintain current rate policy, but the key will be whether they announce a third round of QE. We think there is a 50-50 chance that they announce a program to increase the amount of mortgage-back securities they're purchasing. The move would be to complement the White House's plans to revise the Home Affordable Refinance Program (HARP) and jump start the US housing market and potentially reinvigorate the broader economy. The key is the timing. The details of the HARP revisions are not yet finalized (sometime by mid-Nov.), so the Fed may announce a conditional QE3 pending the changes to HARP. But US data has also showed some improvement in recent weeks, potentially leading the Fed to hang on to this last bullet. Still, with unemployment stuck at 9%+, what's the point in waiting. Bernanke will hold a quarterly press conference and take questions following the announcement.

This will be a major event for the USD, as recent Fed speakers hinting at QE3 have contributed to recent USD declines/rallies in stocks and other risk assets. If the Fed delivers QE3, we would expect further USD declines/gains in risk assets, but the size of the program will matter. QE3 on the order of $500 bio may not see much further USD weakness as the rumor has already been sold. QE3 of USD 1 trillion or more would likely trigger further USD declines. Analyst estimates suggest a program of USD 1-2 trillion is what's needed to have the desired impact on the housing market and economy. No QE3 and the risk rebound is likely to reverse hard, especially if markets are already having second thoughts on the EU debt plan.

The ECB will meet on Thursday, with new president Mario Draghi at the helm. We don't expect any changes to the ECB base rate, but we do expect a further weak economic outlook, which may add to pressure on the EUR. We expect Draghi to reiterate the ECB's opposition to participating in the EFSF and maintain that the ECB will not be the lender of last resort. The ECB is the only European institution with the ability to fully resolve the debt crisis, so continued opposition is not a good thing for overall confidence in the debt crisis.

The RBA is meeting next week and is expected to announce a 25 bp rate cut to 4.50% when it announces on Tuesday afternoon Downunder, but it's a close call with 11out of 26 forecasts indicating steady rates. More benign CPI this past week opens the door to a rate cut and we think recent AUD gains will also bias them toward a cut.

Startup a forex hedge fund in record time perfectly legal and under eurozone jurisdiction

mql4indonesia@gmail.com — Wed, 12 Oct 2011 22:59:00 +0000

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Post by Shavasb

Successful traders managing to beat the market and with verified track record must seriously take into account commencing up their very own forex/commodity or equity hedge funds, attract funds from other traders and perhaps turn out to be the next billionaires as opposed to setting up a foreign exchange brokerage or an investment firm dealing in equity, bonds or foreign exchange.

Suppose you are the profitable trader and you can approach and raise funds from a tiny group of traders who trust your track record, but you are frightened by the regulatory hurdles, because we all know that even in the least developed markets, turning into involved in the monetary industry and then trying to raise money is a difficult and time consuming procedure, which in most circumstances kills the entrepreneur spirit.

Must you give up? Undoubtedly no, since there are answers for your requirements which can get you up and operating in record time, in a completely legal way and below EU jurisdiction permitting you to raise money from investors and managing your affairs via a versatile and tax friendly atmosphere. Here is how it performs.

A Private Fund or in legal jargon, a variable capital International Collective Investment Scheme (ICIS) will be set up primarily based in Cyprus, which essentially indicates when investors enter the Fund with funds, the organization concerns them with units and when they redeem their units and exit the Fund, these units are cancelled.

It has to be noted that the investment goals, the composition of the owners, directors, entry and exit charges and other problems, repayment clauses as nicely as administrative costs will be integrated in the Offering Memorandum (OM), which is basically the legal document through which an investor enters or exits the ICIS.

The supervisor and regulator of ICIS in Cyprus is the Central Financial institution of Cyprus, a eurozone member central bank.

In order to setup the Fund or the ICIS, the minimum requirement is for the promoters to give at least a single shareholder who will inject the minimal capital of EUR 50.000 or USD 70.000 and will become the founding member holding the voting shares and hence absolute handle, if they so wish. Other investors may be non-voting.

The ICIS also demands at least two competent directors (1 of whom is preferable to be Cyprus resident for the Fund to qualify for tax positive aspects), a reliable Custodian Financial institution which will hold the assets and an independent Administrator firm which will calculate the Net Asset Worth of the Fund, based on which investors will enter or exit. A regulated fund management company could act as the all round fund manager who will then outsource the real management to the specialist manager. The fund management company requires to make positive that the EU

Hedge funds reduced exposure ahead of big rally

mql4indonesia@gmail.com — Tue, 11 Oct 2011 02:20:00 +0000

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By: Saxo Bank

Hedge funds and large investors continued to reduce their long exposure to commodity futures and options last week. The data compiled 3 October showed a 4.2 percent reduction to 920,000 lots, the lowest level since July 2010.

This also helps to explain the strength of the rally that followed as funds scrambled to rebuild positions. The rally that began Wednesday was the biggest three-day rally of the year and was helped by increased efforts in Europe to deal with the debt crisis and signs that the U.S. economy may avoid recession.

The energy sector saw an increase in net longs of 20 percent primarily helped by a sharp reduction in the Natural Gas short position. The WTI crude position meanwhile continued to be scaled back, moving below 200,000 lots just ahead of the rally which began last Wednesday when U.S. inventories showed a much bigger draw than expected.

Exposure to the grains sector was cut by 2 percent to 242,000 lots, the lowest level since July 2010 and much below the 2011 peak of 890,000 lots back in February. The “World agriculture supply and demand estimates” report will be released this Wednesday and any signs of tightening could attract new buying given the sharp reduction of long positions over the last month.

The metal sector was flat on the week with a small increase in gold longs - the first in four weeks - being off-set by another increase in short copper positions.

The soft sector also saw a reduction in speculative longs as positions in sugar and coffee were reduced while the cocoa short position increased further.

Hedge funds reduced exposure ahead of big rally

mql4indonesia@gmail.com — Tue, 11 Oct 2011 01:53:00 +0000

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By: Saxo Bank

The metal sector was flat on the week with a small increase in gold longs - the first in four weeks - being off-set by another increase in short copper positions.

The soft sector also saw a reduction in speculative longs as positions in sugar and coffee were reduced while the cocoa short position increased further.

Shrewd hedge funds profit in turbulent September

mql4indonesia@gmail.com — Fri, 07 Oct 2011 01:56:00 +0000

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LONDON, Oct 6 (Reuters) - A select band of shrewd hedge fund managers have avoided September's market pitfalls to post healthy profits, even as Europe's deepening debt crisis leaves much of the $2 trillion industry nursing painful losses.

Bearish macro bets such as owning U.S. and European government bonds, as well as being short equities, commodities and the euro, have helped funds navigate a crisis that has seen fears of a global recession and a banking crisis grow.

Brevan Howard's $25 billion Master fund, one of the world's biggest hedge funds, gained 1.5 percent last month to September 23, said two sources who had seen data on the fund's performance. This takes profits this year to 12.3 percent.

And GLG, part of Man Group, saw its $2 billion Atlas Macro fund, which is managed by Driss Ben-Brahim and Jamil Baz, gain an estimated 6 percent in September, said a person close to the company.

In contrast, the average hedge fund lost 3 percent last month, according to Hedge Fund Research's HFRX index, taking year-to-date losses to 8.4 percent. The third quarter was the worst for three years.

Equity funds were hard hit, particularly those focusing on stocks' fundamental value, with MSCI's World index of stocks falling a further 8.8 percent during the month.

A number of industry insiders have pointed to markets being preoccupied with economic worries, rather than company fundamentals.

'This is not 2008, but perhaps one similarity with 2008 is that market's focus is on macro, and no-one is really focusing on the micro,' said Frank Frecentese, global head of hedge fund investments at Citi Private Bank.

EQUITY, CREDIT FUNDS

Global macro funds -- made famous by the likes of George Soros -- have tended to be more bearish than equity managers and have benefited from falling bond yields in countries such as the United States, Germany and the UK.

On Thursday the Bank of England announced a further 75 billion pound stimulus, pushing yields on longer-dated debt to record lows.

Stenham Asset Management said its Trading fund, which invests in macro hedge funds, gained an estimated 0.8 percent in September, taking third-quarter gains to 3.4 percent.

Meanwhile, a smattering of equity managers were able to profit, even as markets fell.

Marshall Wace's $1 billion Eureka fund, managed by co-founder Paul Marshall, gained 1.5 percent in September, taking gains this year to 5.8 percent, said a source familiar with the matter.

And its Global Opportunities fund, which is run by Fehim Sever and which focuses on emerging markets, rose 6.5 percent last month, lifting this year's profits to 23.8 percent.

Among credit funds, CQS, one of Europe's biggest hedge fund managers, saw its Credit Long-Short fund, which is managed by Simon Finch, gain 1.7 percent in September, taking year-to-date gains to 7.9 percent.

This was helped by active trading of both long and short positions, according to a source familiar with the matter.

And while GLG's Emerging Markets fund has suffered this year, its Emerging Credit Opportunities portfolio gained 1 percent last month.

(Reporting by Laurence Fletcher. Editing by Chris Vellacott and Will Waterman) Keywords: HEDGEFUNDS/PERFORMANCE

(laurence.fletcher@thomsonreuters.com)(+44)(0)(20 7542 7729)(www.twitter.com/reutersfletcher)

Forex: Currency Speculators add to bets in favor of US Dollar, decrease Yen longs

mql4indonesia@gmail.com — Mon, 03 Oct 2011 03:08:00 +0000

By CountingPips.com

The latest Commitments of Traders (COT) report, released on Friday by the Commodity Futures Trading Commission (CFTC), showed that large futures speculators remained bullish in favor of the US dollar against the other major currencies as the trading environment continued to be risk averse. Non-commercial futures traders, usually hedge funds and large speculators, decreased their long positions in the Swiss franc, Japanese yen, Australian dollar and the New Zealand dollar directly against the US dollar while increasing bearish bets for the euro, British pound sterling, Canadian dollar and the Mexican peso, according to data reported on September 27th by the CFTC.

EuroFX: Currency speculators decreased their futures positions for the euro against the U.S. dollar for a sixth consecutive week as sentiment continues to be bearish for the European common currency. Euro positions declined as of September 27th to a total of 82,473 net short contracts from the previous week’s total of 79,460 net short contracts reported on September 20th. Euro positions are at their lowest point since June 8, 2010 when net contracts were on the short side at -111,945.

The COT report is published every Friday by the Commodity Futures Trading Commission (CFTC) and shows futures positions as of the previous Tuesday. It can be a useful tool for traders to gauge investor sentiment and to look for potential changes in the direction of a currency or commodity. Each currency contract is a quote for that currency directly against the U.S. dollar, where as a net short amount of contracts means that more speculators are betting that currency to fall against the dollar and net long position expect that currency to rise versus the dollar. The graphs overlay the forex spot closing price of each Tuesday when COT trader positions are reported for each corresponding spot currency pair.

GBP: British pound sterling positions edged lower for the fifth consecutive week to stand at the lowest level since June 2010. Pound positions decreased to a total of 64,010 short positions on September 27th following a total of 59,755 short positions as of September 20th.

JPY: The Japanese yen net contracts edged lower after gaining for two consecutive weeks, according to data on September 27th. Yen net long positions decreased to a total of 42,322 net long contracts reported on September 27th following a total of 45,617 net long contracts that were reported on September 20th.

CHF: Swiss franc long positions declined for a fifth straight week as of September 27th. Speculators continued to trim bets for the Swiss currency futures to a total of 2,424 net long contracts following a total of 4,221 net long contracts as of September 20th. The Swiss currency, usually a popular safe haven currency, has remained in neutral since the Swiss National Bank conducted a policy to fight the strength of the franc and maintain a pegg against the euro at the 1.20 level.

CAD: Canadian dollar positions fell further on the bearish side, according to data on September 27th. CAD net contracts fell to a total of 20,550 short contracts as of September 27th following an increase to a total of 5,458 net short contracts reported on September 20th.

AUD: The Australian dollar long positions declined sharply for a third straight week as of September 27th as speculators have decreased their sentiment for the Aussie. AUD futures positions fell to a total net amount of 5,167 long contracts following a total of 23,095 net long contracts reported as of September 20th. The decline in speculators data marks the lowest level for Aussie positions since July of 2010.

NZD: New Zealand dollar futures positions fell for a second consecutive week and declined to their lowest level since the middle of April, according to the data reported on September 27th. NZD contracts fell lower to a total of 9,591 net long contracts following a total of 13,565 net long contracts registered on September 20th.

MXN: Mexican peso contracts continued their decline lower and dropped for the eighth straight week to remain on a bearish front against the dollar. Peso positions declined to a total of 20,626 net short speculative positions as of September 27th following a total of 16,890 short contracts that were reported as of September 20th.

COT Data Summary as of September 27, 2011
Large Speculators Net Positions vs. the US Dollar

EUR -82,473
GBP -64,010
JPY +42,322
CHF +2,424
CAD -20,550
AUD +5,167
NZD +9,591
MXN -20,626

Gold in free fall - 20% down from high

mql4indonesia@gmail.com — Mon, 26 Sep 2011 23:49:00 +0000

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The gold price is in free fall and only another major global crisis will stop its descent.

After falling 11% last week, the precious yellow metal dropped 7.5% on Monday - its steepest one-day fall in five years - bringing the gold price down 20% from its all time high of US$1,920.30 an ounce in early September.

This makes this month gold's worst month in three years.

By late afternoon, the precious metal had lost almost US$50 from the US$1,641.39 it was quoted at the JSE's close on Friday to trade at US$1,591.50 - some US$328.80 from its all time high.

Many market watchers warned that a correction was coming and now they are saying the price is likely to bottom and level off before it starts to climb again.

“Gold has certainly taken a dive - and could stumble further in the days immediately ahead - but I think we will see the yellow metal begin its comeback sooner rather than later, possible in the next few days,” said Jeffrey Nichols, managing director of American Precious Metals Advisors.

In his latest Nichols On Gold note the gold and precious metals economist said the precious metal was “just an innocent bystander”.

He said rather than any dramatic reversal in world physical markets it looked like the precipitous price decline in recent days could be blamed entirely on speculators including some prominent hedge funds and the trading desks of the big Wall Street banks, which have been reversing their positions or cashing out of gold altogether.

“Nothing that has occurred in the past few days in any way diminishes my long-term enthusiasm about gold-price prospects. The same bullish gold-market fundamentals and macroeconomic trends that I have been discussing for many years now remain in place and promise significantly higher gold prices over the next five years or longer,” Nichols said.

Investors cashing out of gold and getting back into cash, particularly the US dollar, demonstrates just how jittery investors are in uncertain markets.

While the threat of another global economic meltdown has not been dismissed, the US dollar is the sweetheart of investors.

“In times such as these, the US dollar does then reign supreme. It should and it shall. 'Money' is finding its way to its ultimate safe harbour, and clearly that is not the euro and that is not gold,” said Dennis Gartman in Monday's Gartman Letter.

In the pecking order of safe havens precious metal rank well behind the US dollar and the dollar is the final bastion in panic.

“What is taking place in the metals is a classic question of margin clerks vs. the market; a game of 'money' and not a game of fundamentals,” said Gartman, adding that simply put, 'money' and 'margins' trump fundamentals.”

Interestingly, Sharps Pixley noted that the recent move in gold looks on the face of it like a 'Lehman's moment'.

Back in October 2008 when Lehman's collapsed gold also fell as margin calls in collapsing equities were funded by the selling of profitable positions in gold.

Gold's move was counter-intuitive in that it did the opposite of what was widely expected.

Moving counter to the US dollar, gold seems to be moving in tandem with the rand.

The rand flirted with levels around R8.50 last week with some forex traders warning the local currency could move through R9 to the US dollar.

On Monday afternoon it was holding up well at levels around R8 against the greenback.

“For about a year and a half, our two currency models reflected that the Rand was overvalued by close to two standard deviations, the extent of the recent sell off, was sudden and rapid. Based on our models now the Rand is fairly valued but usually it overshoots when it corrects from close to two standard deviations over/under valuation,” said Aeon Investment Management.

Aeon Investment Management also believes that the gold price is probably in a short term correction phase and will most likely start forming a base and appreciate towards the end of the year.

At these low prices the market has seen buyers snap up the precious metal, particularly in India where the wedding season is getting underway.

It is also a good time for those who want to get into gold at more reasonable levels and ahead of the next potential rally.

“If someone is silly enough to sell huge volumes of gold for effect - it is clear that there are plenty of investors willing to take that metal off their hands at a knock-down price. For gold bulls this will in hindsight be seen as the clearing out of exhausted longs - a pruning if you like - with new growth yet to come through,” said Sharps Pixley CEO Ross Norman.

“Where's the next $200 in gold - we confidently predict to the upside,” said Norman. - I-Net Bridge

The fact that less is more will always be true in trading

mql4indonesia@gmail.com — Fri, 23 Sep 2011 12:21:00 +0000

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“I don't mind having a bad week, or even a few bad weeks. What's important to me is if I can look at substantial profits at the end of the year! And right now it looks like I will be able to do so again at the end of this year, even though 2011 didn't start out that gloriously.” - Marco Mayer

Hello:

Successful trading rules are a paradox. A risk control rule says: Risk less to make more or risk more to make less. The fact that less is more will always be true in trading. For example, less intricate and easier speculation methods tend to produce more agreeable and far more decent returns (not account doubling, which is repugnant to disciplined and experienced risk managers). Your goal is to metamorphose into a proficient and adept speculator. A proficient and adept speculator acknowledges that trading oughtn’t to take all your time. Trading should be a factor that facilitates your ability to have the time and opportunity to live a fulfilling life and engage in other activities you enjoy doing.

Below is the summary of some of my trading activities this week.

AUDUSD

Primary Trend: Bearish

Having opened with a vivid gap this week, this pair has fallen by about 500 pips. I was able to gain 200 pips from this bearish move. The next line of action would be to sell on rally.

NZDUSD

Primary trend: Bearish

Traders need to bear it in mind that we’re just seeing the beginning of another bear markets in Forex. Price is the leading indicator and it should act in helping traders know the next thing to do, which is the assumption of short trades in this context. In the world of trading, price is king.

AUDNZD

Primary trend: Bearish

This cross is a kind of ranging right now. But a closer look reveals that the Aussie is still stronger than the Kiwi, though with limited domination. The price must break the level at 1.2600 - which is a very strong resistance – before any dependable bullish movement can be seen

EURCAD

Primary trend: Bearish

Also starting with a gap this week, this cross has gone up by approximately 500 pips. There’s a threat to the longer-term bearish outlook. The next plan is buy to a pullback, using our predefined rules. The trading rules mentioned here provide ready-made answers to what we should do in terms of trading orders we should place.

EURNZD

Primary trend: Bearish

Here too, there’s an extremely grave threat to the bearish trend. If there’s a continuation of the present bullish breakout, then the weak market would be rendered invalid. The price on this cross is above the SMA 200, while the SMA 50 is still below the SMA 200. The ADX 20 is moving above the level 23, just going to the level 30. +DI has just moved above –DI, indicating the beginning of a protracted northward move. The Kiwi can’t stand this!

GBPCHF

Primary trend: Bullish

The bullish movement on this instrument is still intact, though it’s getting tricky to find a suitable entry price. One way of handling this is to use both Buy Stop and Sell Stop orders in an equilibrium zone, so that I can catch the next price breakout. With this, I try to keep it simple and just wait for setups to unfold.

Conclusion: How do you define success in trading? Ed Ponsi has an interesting answer to give. His answer and other quotes conclude the articles below. They point out the big difference between the disciplined trader’s goals and mindset and the gambler’s goals and mindset.

1. “Well, if you are making money, you are ahead of the majority of traders, but anyone can make money in the short run. I would define success in trading as consistency. A trader who can make just 2% to 3% per month, every month, without taking inordinate risk or suffering a severe drawdown is a successful trader. He or she is outperforming most traders, hedge funds, mutual funds and indexes. A trader who can make more than this on a consistent basis, year after year, is a rock star.”

2. “When you are new to trading, a losing streak becomes really bothersome because we begin to doubt ourselves. We begin to question whether or not we have a future in this business. Over time, I began to realize that losing is just a part of winning, a necessary part. To use a military analogy, you cannot win the war unless you are willing to lose some battles along the way. It is necessary to suffer short-term losses in order to achieve long-term success. Once I realized this, losing did not bother me as much.”

3. “Usually, the longer I am in a trading position, the more profitable it has become because I am trying to capture a trending move, and I want to hold it until the trend fails.”

Derivatives | Cautious approach to innovation

mql4indonesia@gmail.com — Thu, 22 Sep 2011 02:36:00 +0000

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Anup Roy

One critical derivative product introduced after the downturn is the cross-currency option, launched on the exchanges in October 2010

One of the key reasons why the Indian financial system was not affected by the 2008 global meltdown was the banking regulator’s conservatism. The central bank ring-fenced the Indian banking system by imposing stringent criteria on various instruments, including trades in permitted derivative products, and deferring the introduction of others, one of which was blamed for sinking large global financial institutions.

The Reserve Bank of India (RBI) had proposed the introduction of credit default swaps (CDS) a number of times since 2003, but drew up final guidelines for them only this year.

Developments in the currency and interest rate derivatives markets show RBI has only recently opened up the space. In 2010, it introduced currency options though currency futures were launched just before the credit crisis in 2008. Both have garnered reasonable volume, but are nowhere close to their volumes overseas.

Derivatives allow companies to hedge their currency risks and play a key role in asset-liability management. It is a must-have for firms with most of their inflows in dollars and costs in rupees.

“We live in a world where there is mismatch and we need certainty that the mismatch can be bridged. That’s why we need various kinds of derivatives,” said Rostow Ravanan, chief financial officer of software firm MindTree Ltd. “Availability and access to a robust derivatives market is what brings stability in the operation of a corporate.”

As Indian firms gets connected to the world for their operations, the need for derivatives is on the rise, say bankers. “Derivatives are here to stay,” said Ananth Narayan G., head of fixed income, currencies and commodities at Standard Chartered Bank. “Risk remains extremely high to stay un-hedged. Clients’ risk-management needs will always be there, so will derivatives.”

One critical derivative product introduced after the downturn is the cross-currency option, launched on the exchanges in October 2010. RBI allowed options on four currency pairs: rupee-dollar, rupee-yen, rupee-pound sterling and rupee-euro. Volume in this segment has crossed $500 million on the National Stock Exchange, but is far below volumes in the currency forwards market.

Volume in futures and options combined crossed Rs1 trillion in July, in a sign the currency derivatives market is picking up pace. Average volume in exchange-traded currency derivatives is Rs60,000-80,000 crore.

Banks and retail investors dabble in the segment as speculators. Small and medium enterprises enter the market for their simple needs, but big firms largely stay away as their needs are complex and they need custom contracts that exchanges cannot provide.

RBI governor D. Subbarao has indicated he believes in the dictum Festina lente —make haste slowly—when it comes to reforms. This, say bond market dealers, indicates RBI will be cautious and ensure regulations are well entrenched before introducing more derivative products.

The central bank has been cautious regarding the introduction of new products. It issued four draft discussion papers and guidelines before coming up with final guidelines on CDS in India.

There are two kinds of derivatives—traded bilaterally over the counter (OTC) and exchange-traded. Until a few years ago, most of the derivatives in India were of the OTC kind. Even now, the size of the OTC currency market is larger than that of its exchange-traded counterpart.

The currency derivatives segment includes foreign currency forwards, currency swaps and currency options. The interest rate derivatives segment includes interest rate swaps, forward-rate agreements and interest rate futures (IRF). Then, there are products linked to the overnight money markets, such as collateralized borrowing, lending obligations and overnight index swaps.

Overnight money market-linked products are overwhelmingly successful, but products that involve a longer-term view have failed.

In most developed nations, fixed-income markets compete with equity markets to attract investors. In contrast, in India, the daily equity market volume is at least double that of the debt market, including government and corporate bonds.

A few large investors, mostly banks, control the bond market. Other investors include insurance companies, a few mutual funds, and pension and provident funds. They are also the medium through which RBI intervenes in the bond and currency markets.

Several committees have been formed to deliberate on measures to deepen the bond market and introduce new products. The most influential was headed by R.H. Patil, chairman of National Securities Depository Ltd and Clearing Corp. of India Ltd. The key recommendations of the committee, submitted in 2005, are yet to be implemented despite the finance ministry’s acceptance of them.

The cautious attitude of the regulator—that derivatives are used for hedging and not speculation—is helping to safeguard the financial system, but may be impeding the market’s growth. As the derivatives market will be dominated by hedging needs rather than speculation purposes, currency derivatives will continue to outshine interest rate derivatives, say experts.

In global markets, interest rate derivatives are the most popular products, followed by currency derivatives. The volume in equity derivatives is small in comparison. But in India, equity derivatives have notched up large volumes compared with currency and interest rate derivatives. In fact, currency derivatives are picking up well, but interest rate derivatives, particularly interest rate futures, have not been accepted.

Experts say India has all the derivatives products that make a market vibrant. New products, they say, may not be needed at all.

“You don’t need any fancy derivatives to make the market more vibrant. You just need to have more participation of India forex and simplification of rules,” said Abhishek Goenka, chief executive officer of India Forex Advisors Pvt. Ltd.

The main problem with the available derivatives is they are not traded in their current form and RBI may have to eventually tweak them to make them more market-friendly. RBI may have to introduce some amount of speculation and change the structure of the products.

This is a contentious issue.

Many banks have significantly downsized or completely wound down their derivatives teams, especially after RBI clamped down on exotic deals.

In a way, this indicates that the future of derivatives may be constrained by RBI if it continues with its tough supervisory stance. There will not be many entities to make two-way quotes available or extend liquidity in the market.

Indian public sector banks that assume the responsibility of being market-makers for any new instrument behave in a similar manner. It has often been seen that after the launch of a derivative product, volumes go up sharply as banks trade aggressively among each other. The volume thins out every passing day as they lose interest and other players don’t fill in.

To invite serious entities into the market, RBI needs to change the structure of the products, say market experts.

As per the present set of rules, all derivatives must be physically settled. That means, at the end of the contract, the buyer should buy the underlying assets. This hurts fixed-income derivatives in particular.

For any fixed-income derivative product with a long-term view, there are not enough bonds that are liquid in the market. Since they cannot be traded, it becomes uneconomical for the purchaser to get these papers as they need to be held till the bonds mature. Products such as IRF are not picking up despite the regulators’ best efforts.

However, RBI has introduced cash-settlement in 91-day treasury bills IRF, which experts say is a first step to introduce cash settlement in a range of other derivatives products. The Indian market could see progress on this front in the coming days.

In currency markets, liquidity is expected to improve in other maturity markets. Now it is limited to contracts maturing in two-three months, but Goenka of India Forex expects liquidity to improve in the 6-12 month maturity basket as well in the coming days.

Corporate clients will need to have a bigger play in the exchange-traded currency market. They currently do not get longer-tenure contracts of their liking because of the absence of banks—the market makers in the longer tenure of the exchange-traded currency derivatives market.

There is a serious lack of jobbers and arbitrageurs in the currency market too. These professionals quote two-way prices and act as intermediaries in the currency derivative markets. Currency market participants say going forward, India will see more such intermediaries as they are in equity market sub-brokerages as currency derivatives become fashionable with retail traders. Retail traders have only recently started participating in the currency derivative segment and their participation will increase.

Unfinished agenda

The biggest problem of India’s financial markets is the absence of a term-money market, needed to integrate all the money market rates with the final lending rate of banks.

This is how developed markets perform. Lending rates are linked to the term-money rates prevailing in the market and banks have to add a risk premium to it.

Lending rates of Indian banks have become more transparent with the introduction of a base rate system. However, the reference rate taken to arrive at the base rate differs from one bank to other. Once the term-money market comes into play, banks’ base rate, certificates of deposit, fixed-income rates and even CDS, besides a plethora of other instruments, can be standardized. This will bring in a lot more transparency and with it a different set of players in the market.

In fact, banks don’t need to have different rates among themselves once there is an active term-money market. They may just check rates and make their decisions on a daily basis, as with a standardized CDS. This, according to some, could become a reality one day in the Indian banking system. There could be Libor-equivalent lending as in overseas markets. Libor stands for London inter-bank offered rate.

If markets become deeper, rates will converge and capital convertibility will open up. But there are economic implications of opening up. The market may turn into one for speculators from being one for hedgers.

As India’s links with the global markets strengthen, OTC derivatives are getting standardized and the documents signed between banks and the clients are adhering to the standardized international format laid down by the International Swaps and Derivatives Association. This shows that firms are getting aligned with international standards when it comes to derivatives.

Interest rate derivatives may include instruments such as caplets, floorlets and swaptions, while credit-risk derivatives may include credit-linked corporate notes, credit-linked swaps, asset-backed securities, etc.

For such instruments to succeed, Indian companies will need to acquire the relevant market expertise.

“These derivatives are needed to manage balance sheets with multi-currency exposure. If Indian companies become big and mature enough to dabble in multi-currencies, then these instruments will be needed. But Indian companies’ balance sheets are fairly simple, so these instruments are a bit far away for the Indian market,” said J. Moses Harding, head of markets at IndusInd Bank Ltd.

The interest rate market is currently more or less limited to overnight index swaps.

An interest rate swaps market has also developed in the OTC space. Banks are the key participants here and while the volume is low, it is steadily gaining popularity. The popular benchmark here is the Mumbai inter-bank offer rate (Mibor) and the Mumbai inter-bank forward offered rate (Mifor).

As India needs to have its own lending benchmark along the lines of the Libor, Mifor and Mibor-related derivatives will gain in popularity, experts say.

Having said that, derivatives are instruments created when there is a need felt for them.

“Derivatives innovation is limited by imagination. You can create as many derivatives as you want, but there should be proper regulations around to control them,” said Ravanan of MindTree.

According to bank and corporate treasurers, the greatest lesson learnt after the 2008 crisis was that derivatives should be used strictly for hedging and not for speculation. Companies that dabbled in speculation and bought derivatives for making quick money learnt their lesson the hard way.

Hedge Fund Heavyweight Sees Gold at $2,200

mql4indonesia@gmail.com — Wed, 21 Sep 2011 01:44:00 +0000

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Gold, platinum and Brent oil will lead gains in commodities as investors seek to protect their assets and shortages emerge, according to Tony Hall, the hedge- fund manager who earned 33 percent for his clients this year.

Gold may climb 21 percent to a record $2,200 an ounce by the end of 2011, platinum may gain 10 percent and Brent could rise 25 percent to $140 a barrel in six months, said the London- based chief investment officer of Duet Commodities Fund Ltd., which manages more than $100 million of assets. Its eight-month gain compares with a mean return of 0.6 percent across commodity hedge funds tracked by HedgeFund.net and beat larger rivals such as Clive Capital LLP and Fortress Commodities Offshore Fund Ltd.

“The fear of recession, the fear of worse economic numbers is weighing on commodities and stopping gains from fundamentals from coming through,” said Hall, 31, who spars as a heavyweight boxer. “We still believe in the gold story. If you believe the world is in trouble or in further economic growth disruption, then gold is a good safe haven. If you believe that the world is going to come out okay, then it’s a good inflation hedge.”

At a time when the MSCI All-Country World Index of global equities declined 10 percent this year, the Standard & Poor’s GSCI measure of 24 commodities advanced 2.7 percent, led by silver, gold and energy.

Investors held about $431 billion in raw materials by July, an almost fivefold gain in six years, Barclays Capital says. As equity holders contend with losses of $8.5 trillion since May, speculators made their biggest wagers on higher commodity prices in almost three months in the week to Sept. 6 as they anticipated that even weaker economic growth will mean shortages.

Winning Run

Gold advanced 28 percent to $1,819.88 this year, heading for an 11th consecutive annual gain, the longest winning streak in at least nine decades. It’s the second-best performer in the S&P GSCI behind silver, which rose 31 percent. Gold is trading at 45 times the price of silver, down from a multiple of 84 in 2008. Silver, the precious metal most used in industry, rose more than threefold to $40.4338 since the end of that year.

The gold price of $2,200 predicted by Hall would be 15 percent more than the all-time high of $1,921.15 reached Sept. 6. It would still be below the then-record $850 reached in 1980, equal to $2,337 now in inflation-adjusted terms. Bullion had tumbled 5.7 percent from its all-time high by Sept. 16.

Central banks are expanding their gold reserves for the first time in a generation. Euro-area nations added 0.8 metric ton to their holdings this year, the first increase since 2001, International Monetary Fund data show. Central banks and government institutions worldwide bought 192.3 tons in the first half, according to the World Gold Council.

Arno Pilz

“I’d say gold will have a very good run higher, and a very good retracement would be justified,” Hall said. “If we see a retracement back to $1,700, I think at that point would be a good opportunity to get in.”

Gold and platinum-group metals, used mostly in jewelry and catalytic converters for cars, were the best performers for Duet in the past two months, said Hall, who has traded commodities for about a decade. The fund also profited from betting against silver in May and June, he said. Silver futures traded on the Comex exchange in New York fell from $49.845 an ounce on April 25 to as low as $32.30 on May 12.

That trading idea came from Arno Pilz, 42, who founded the fund with Hall in July 2010. The former head of metals trading at Lehman Brothers Holdings Inc. oversees the fund’s investments in precious and industrial metals while Hall runs the energy trades. They plan to add an agricultural specialist in second- half 2012 at the earliest and cap total assets at $1 billion.

Clive Capital

Pilz, who has traded metals since 1999, has a Master of Philosophy degree in management studies from Oxford University’s Templeton College. He makes his own cider and salami and is building a 1:2 scale Land Rover for his two daughters.

Hall and Pilz beat larger rivals including Clive Capital, which oversees $4.8 billion and fell 11 percent this year, and the $1.1 billion Fortress Commodities Offshore Fund, which returned about 1.8 percent, according to people with direct knowledge of the funds’ performance.

Duet’s best trade was on Brent crude in the second quarter, Hall said. The contract, traded on ICE Futures Europe in London, gained as much as 34 percent this year as fighting erupted in Libya, which has Africa’s largest oil reserves. The disruption to supplies of light crudes, which yield a higher proportion of more profitable products including gasoline, increased demand for similar grades such as Brent.

‘New Highs’

Brent costs about $24.59 a barrel more than the West Texas Intermediate grade traded on the New York Mercantile Exchange, a global benchmark, up from about parity in 2009. The premium dropped from $25.93 on Sept. 6 after a 600,000-barrel cargo of Libyan crude was offered for shipment, a sign exports may resume, said three people with direct knowledge of the transaction.

Brent slumped 12 percent to $111.81 a barrel since early April because of concern that slower economic growth will curb demand for energy. The Paris-based International Energy Agency cut global oil demand forecasts for this year by 200,000 barrels a day and 400,000 a day for 2012 on Sept. 13, and said stockpiles in developed nations fell to below the five-year average for the first time since the global recession in 2008.

“Eventually the crude fundamentals will come through and become the dominant factor,” said Hall, who holds an economics degree from University of Bath. “We are going to see new highs in Brent over the next six months.”

More than half Duet’s commodity book is expressed through options, with crude and precious metals positions concentrated in periods three to six months ahead, said Hall, who previously worked for Credit Suisse Group AG and Deutsche Bank AG.

Gasoil Cracks

Fuel was also the fund’s worst trade, on a view concerning price differentials of gasoil and other products.

“Energy relative value has been the most disappointing part of the portfolio this year, with our view that middle distillates would outperform other products,” he said.

The so-called cracks, reflecting the spread between the price of the refined product and crude, slumped 29 percent since peaking at $24.17 a barrel on March 16, according to data from PVM Oil Associates, a London-based brokerage. Gasoil is typically used as a heating fuel.

Speculators held 1.275 million net-long futures and options across 18 commodities tracked by the U.S. Commodity Futures Trading Commission in the week ended Sept. 6, the most since the week ended June 14, data compiled by Bloomberg show. They had raised that combined position for four consecutive weeks. They cut their bullish bets by 5.2 percent in the latest week.

Platinum Bull

Duet is also bullish on platinum, which gained 2.3 percent to $1,810.38 an ounce this year. The metal, mined mostly in South Africa, will trade as high as $2,000 to $2,200 this year, Hall said. Holdings in exchange-traded products backed by the commodity are at a near-record 44.3 tons, valued at about $2.6 billion, data compiled by Bloomberg show.

Platinum is trading at a ratio of 2.5 times the price of palladium, compared with a 10-year average of 3.5. The metals are mined together and both are used in autocatalysts.

Platinum supply will fall 21,000 ounces short of demand this year, widening to a deficit of 54,000 ounces in 2012, Barclays Capital estimates. Mining companies are going as deep as 1.4 miles underground to maintain output, pumping chilled air down mine shafts to cool seams as hot as 160 degrees Fahrenheit.

“Platinum looks like great value in the precious metals complex,” Hall said. “Platinum is a store of value, a precious metal and an industrial metal. If the economy picks up we’re going to see bigger demand in catalytic converters.”

Hedge Funds Stripping Assets from Europe

mql4indonesia@gmail.com — Tue, 20 Sep 2011 02:12:00 +0000

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Managers on the US money market, headed by Vanguard Group Inc and Legg Mason Group Inc, are cutting loans to French banks so fervently, that it may force these banks to increase their capital by selling stocks, said William Prophet, an analyst with Deutsche Bank Securities Inc. Meanwhile, Italian officials, led by Prime Minister Silvio Berlusconi, conducted negotiations with their Chinese colleagues about potential investments in the EU’s third-largest economy. Signs of the “Greek contagion” are threatening to infect Italy and have pushed yields on the country’s bonds to a record high since the Euro zone’s creation. Berlusconi’s government swiftly passed a 54 billion Euro austerity package through parliament to convince the European Central Bank to buy its debt. But DT Trading analysts note that over 60 billion Euros spent on buying up European bonds the past five weeks have not convinced investors to buy Italian bonds.

American funds are reducing their shares in European banks amid fears that financial institutes may run into problems with financing after the sovereign debt crisis escalates. Moody’s Investors Service may lower the ratings for BNP Paribas (BNP) SA, Societe Generale SA and Credit Agricole SA (ACA) this week because of a Greek debt package that these banks hold in their funds.

Funds financed by BNP Paribas, Societe Generale (GLE) and Credit Agricole are taking an average of 6.7 basis points more from them on three-month loans as of September 8 than the rate which creditors could pay for analogous financing at the LIBOR market rate in London. In July, these banks could have received financing on commercial paper or short-term promissory notes which would have been lower than the LIBOR rates in London.

Nevertheless, Italy will hold its auction for 7 billion Euro ($10 billion) for selling its own bonds. This comes the day after interest rates on loans increased as the threat of Greece slipping into default spins the flywheel on world markets.

The Italian treasury will sell 4 billion Euros’ worth of its new five-year bonds after yields on 10-year bonds rose to a five-week high of 5.571%. During yesterday’s auction, investors were asking 4.153% from Italy on one-year promissory notes, compared with 2.959% a month earlier. “It’s rather unfortunate that the Italian auction is taking place when the market is in panic mode,” said Fabrizio Fiorini, the head of fixed income at Aletti Gestielle SGR SpA in Milan. “Borrowing costs are likely to remain at elevated levels. The rise in Italian yields is manifestation of a lack of market confidence in European leaders’ ability to tackle the problem.”

The 1.9 trillion Euro debt – more than Spain, Greece, Ireland, and Portugal combined – leaves Italy extremely vulnerable to any advances in borrowing costs while it goes deeper into the pit to refinance its old debts. Sales, which also include at least 3 billion Euros with a turnover time before 2018 and 2020, will help gather 14.5 billion Euros for payments on old debts scheduled for September 15.

Today we await the publication of data on the second part of the inflationary report in the UK. As the Bank of England recently announced in the last published minutes from its July meeting, inflation may reach 5.0% by the end of the year. In light of this assessment, DT Trading economists are expecting the Consumer Price Index to grow by 4.6% in August in annual terms, compared with 4.5% growth according to the July report.

Political support has EUR bears feeling a little more insecure

mql4indonesia@gmail.com — Thu, 15 Sep 2011 02:57:00 +0000

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By: Sean Lee
One of the comments this morning was complaining how everyone was getting so bearish on the EUR, speculating against it and driving it lower, thus perhaps exacerbating or compounding the EZ problems. This is an unfortunate side of the FX market, we do tend to all gang up against one currency and our only reason for doing so is to try and make some money. It certainly doesn't sound like a particularly noble calling when put like that, but the financial markets are a necessary and vital part of the entire global economy and we vultures are part of the eco-system. That said, vultures do also get caught in traps and the strong statements overnight from Merkel and Sarkozy as well as strong support from the US and China, will have some bears getting worried. The hedge fund and CTA community have been piling into this bear EUR story and of course they'll talk it down as much as they can. But if everyone's short already and the bad news stops, then there will inevitably be short-covering rallies.

Asia forex, bonds still best haven from Europe

mql4indonesia@gmail.com — Wed, 14 Sep 2011 11:07:00 +0000

HONG KONG/SINGAPORE: The beating that Asian currencies have taken in the past week will probably open up opportunities for longer-term investors to load up on local currency bonds, with the region still mostly seen as resilient to Europe's debt crisis.

Stronger fiscal positions, long-term expectations for currency appreciation and relatively high interest rates are helping some fund managers stomach a sharp selloff in Asian currencies and take a long view while investing in Asian debt markets.

Other institutional investors have joined the likes of hedge funds and slashed bets on emerging Asian currencies, even though local bond yields have held up relatively well.

Indonesian and Philippine government yields, for example, did not surge in the past month when other global markets reeled from heightened volatility, marking a sea change from a few years ago when foreigners were the first to jump ship at early signs of trouble.

Frederic Neumann, co-head of Asian economics research at HSBC in Hong Kong, said the outperformance of local debt stems from the changing composition of the investor base who display a longer investment horizon and greater staying power.

"They are unlikely to blink in the face of any short-term wobbles in global finance and it is their long breadth that has given emerging market currency and bond markets such resilience in recent weeks," Neumann said.

Even if the U.S. economy tips into a recession as some economists fear, investors believe it would only perversely end up attracting even more inflows into Asian debt as central banks pause or start rolling back some of their aggressive rate hike campaigns.

Last week alone, four central banks -- Indonesia, Malaysia, the Philippines and South Korea-- held rates steady citing growing uncertainty over global growth. .

Then there is the growing trend of central banks looking to diversify some of their holdings away from U.S. debt and keep funds parked within Asia.

The downgrade of the United States' AAA rating by Standard and Poor's last month only highlighted the contrast with Asian economies and their stronger fiscal positions, and is likely to spur even more local debt purchases by the region's central banks, awash in cash from more than $5 trillion in reserves.
In a sign of changing investor perception, sovereign credit default swap spreads of Philippines and Indonesia -- both rated below investment grade -- briefly traded below investment grade rated France last month.

Of course, they may yet be vulnerable to a selloff if the euro zone debt crisis culminates into a Lehman-like market seizure -- a failure of a large financial institution sparking a brutal selloff across markets -- but investors are showing no signs of nervousness.

To be sure, flows, prices and positioning data suggest that there may be a squeeze in long Asian positions but any sharp drop would be seen as an opportunity by institutional investors like pension funds and long-term players.

Inflows into local currency debt have consistently outstripped flows into hard currency bonds since 2010 even as allocations to equities have been volatile since then, a RBS report of EPFR data showed.

Foreign purchases of Indonesian and Malaysian debt have hit a record with overseas ownership in these markets at a third and a fifth respectively, according to government data.

Gold extends the losses amid a strengthening dollar

mql4indonesia@gmail.com — Mon, 12 Sep 2011 10:29:00 +0000

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Gold retreated today after opening the Asian session, extending the losses recorded in the past session, where the strengthening dollar is still affecting the shiny metal to trade lower as investors sold their positions on gold in order to cover the losses seen across the board, while the strengthening dollar gained big time as demand for safe haven surged.

Gold slumped today after opening the Asian session at $1860.65 per ounce, recording a high of $1862.00 and a low of $1826.12, and is currently hovering around $1841.72 per ounce.

With lack of fundamentals today, the shiny metal is still moving against the U.S. dollar, which reached a six-month high and recorded the biggest weekly gains since October 2008 the past week.

The dollar index advanced after the c ommon currency retreated in middle of the worsening debt crisis in Europe, where Greece could suffer from a possible default in case the Greek government was unable to resolve the shortfall in reducing the deficit, where the European Union and the International Monetary funds required in order to provide the nation with the second bailout approved back in July.

The U.S. dollar, which tracks the dollar's movement against other major currencies, inclined today after the opening gap seen today, where the index closed in New York on Friday at 77.15 and opened the session today at 77.45. The index is currently trading around 77.49, after recording a high of 77.77 and a low of 77.31.

On the other hand, the Greek Prime Minister, George Papandreou, approved today to apply new austerity measures to reduce the deficit with another two billion euros in order to meet the requirements set by European lawmakers in attempts to qualify his country to get the suspended aid tranche.

The finance minister Evangelos Venizelos announced the Cabinet's approval to cut one month's wages from all elected officials and impose an annual charge on all property for two years which will be charged through electricity bills to ensure rapid collection.

Moreover, French top banks are expecting a possible downgrade as sources related to the issue said, while Moody's, the rating agency cited French banks exposure to the Greek debt crisis, where French lenders have the highest overall exposure to Greece, according to the Bank of International Settlements.

The banks exposed for a downgrade include BNP Paribas, Societe Generale and Credit Agricloe, as several sources said. This possible credit rating cut came after the French President, Nicolas Sarkozy, called on the Finance Ministry to come up with an austerity plan to overcome the challenges facing the European nations and France in general.

Gold could rebound to the upside in case the U.S. dollar's positive momentum weakens, as the high level of uncertainty, the downbeat growth outlook, the worsening debt crisis and the pessimism seen in Equities should support investors to hold more gold as a safe haven and a hedge against uncertainty.

Silver fluctuated heavily today after opening the Asian session at $41.52 per ounce, however the metal is negatively biased and retreated during the session after reaching a high of $43.35 to a low of $40.43, while the metal trades now around $41.30 an ounce.

Volatility is also dominating Platinum's movement, where the metal opened the session today at $1838.00 per ounce, and recorded a high of $1845.00 and a low of $1831.00 and is currently trading around the opening level.

Apple Was Hedge Funds’ Most-Owned Stock Last Quarter, Citi Says

mql4indonesia@gmail.com — Thu, 08 Sep 2011 03:10:00 +0000

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Apple Inc. (AAPL) wаѕ thе mοѕt-held hаνе a give οf
аmοnɡ thе top 50 hedge funds іn thе second quarter, whіƖе Wells
Fargo Co. (WFC) аnԁ Merck Co. wеrе thе companies mοѕt-owned bу thе
Ɩаrɡеѕt equity mutual funds, according tο Citigroup Inc.

Cupertino, California-based Apple hаѕ held thе top position
іn thе hedge-fund category ѕіnсе thе third quarter οf 2010,
Tobias Levkovich, Citigroup’s chief U.S. equity strategist,
wrote іn a Sept. 6 note. It’s owned bу 16 οf thе 50 chief U.S.
hedge funds. Wells Fargo, based іn San Francisco, аnԁ Whitehouse
Station, Nеw Jersey-based Merck wеrе owned bу 17 οf thе chief
50 mutual funds іn thе three months fіnіѕhеԁ June 30.

“Apple retains thе top spot fοr both growth аnԁ value
hedge funds,” Levkovich wrote. “Thе overlap іn top stocks fοr
thеѕе two investment styles implies a degree οf consensus within
thе hedge-fund world аnԁ possibly a brеаk frοm ѕοmе firms’
traditional investment styles.”

Thе maker οf iPods аnԁ iPads hаѕ outperformed 99 percent οf
thе 500 stocks іn thе Standard Poor’s 500 Index ѕіnсе thе
initiation οf thе third quarter, returning 13 percent frοm June 30
through yesterday. Technology stocks аrе thе Ɩаrɡеѕt industry
held bу both mutual funds аnԁ hedge funds, accounting fοr around
30 percent аnԁ nearly 50 percent οf thе top portfolio positions,
respectively, according tο Citigroup.

Wells Fargo wаѕ thе mοѕt-owned hаνе a give οf fοr value mutual
funds, whіƖе Google Inc. (GOOG) wаѕ thе Ɩаrɡеѕt position fοr growth
funds. JPMorgan Chase Co. (JPM) wаѕ thе second-Ɩаrɡеѕt position fοr
hedge funds, behind Apple, Citigroup ѕаіԁ. Google performed
better thаn thе SP 500 thіѕ quarter through yesterday,
advancing 3.1 percent аѕ thе index lost 12 percent, whіƖе
JPMorgan lost 18 percent аnԁ Wells Fargo fell 15 percent.

Tο contact thе reporter οn thіѕ tаƖе:
Whitney Kisling іn Nеw York аt
wkisling@bloomberg.net

Tο contact thе editor responsible fοr thіѕ tаƖе:
Nick Baker аt nbaker7@bloomberg.net

Article source: http://www.bloomberg.com/news/2011-09-07/apple-was-hedge-funds-most-owned-stock-last-quarter-citi-says.html

Pensions using hedge funds don't always know risks-GAO

mql4indonesia@gmail.com — Fri, 02 Sep 2011 02:20:00 +0000

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WASHINGTON, Aug 31 (Reuters) - More and more U.S. pension plans are investing in hedge funds, even though the plans' administrators struggle to understand what is in the funds or their true exposure to risk, a federal auditor said on Wednesday.

As companies move to defined contribution plans, such as 401-ks, states and local governments have come to dominate the pension world. They rely heavily on returns for their investments to pay benefits to retirees.

Recent volatility in the values of those investments, along with cuts in amounts states and local governments put into the funds during the recession, have raised alarm about shortfalls in pension funding. One answer has been to invest the funds' dollars into riskier hedge funds and private equity that can pay higher returns.

'Such assets may serve useful purposes in a well thought-out investment program, offering plan sponsors advantages that may not be as readily available from more traditional investment options,' said the Government Accountability Office's managing director, Barbara Bovbjerg, who focuses on workforce issues.

'Nonetheless, it is equally clear that investments in such assets place demands on plan sponsors that are significantly beyond the demands of more traditional asset classes,' she added in testimony for the Labor Department's pension council.

The share of large plans with investments in hedge funds grew to 60 percent in 2010 from 11 percent in 2001, according to the GAO. Investments in private equity also grew, to 92 percent in 2010 from 71 percent.

'But such investments are generally a small portion of plan assets,' Bovbjerg said, with the average allocation to hedge funds a little more than 5 percent in 2010.

Plans made slightly more than 9 percent of their investments in private equity.

'Because many hedge funds may own thinly traded securities and derivatives whose valuation can be complex and subjective, a plan official may not be able to obtain timely information on the value of assets owned by a hedge fund,' she said.

'Valuations of private equity investments are uncertain during the investment's long duration, which often lasts 10 years or more,' she added.

Plan sponsors are careful about selecting hedge funds and many make sure they invest in top-performing private equity funds that achieve returns in excess of those in the stock market, Bovbjerg said.

They also perform more due diligence and monitoring on these risky investments than on those in the traditional asset classes in order to mitigate risk.

Still, 'according to plan officials, regulators, and others, some pension plans -- especially smaller plans -- may find it particularly difficult to address the various demands of hedge fund investing,' she said.

(Reporting by Lisa Lambert; Editing by Andrew Hay) Keywords: USA STATES/PENSIONS GAO

Downgrading of the US debt and falling US dollar will continue to drive gold, the yellow metal, to new highs

mql4indonesia@gmail.com — Mon, 29 Aug 2011 13:45:00 +0000

Image via Wikipedia

By Nirmal Bang

Gold prices continue to test new highs. The yellow metal has been in a secular bull run since the inception of this decade. If the inflationary concerns drove prices higher in the mid part of this decade, sovereign debt concerns from the developed world came to the fore in the later years and drew investors to gold in numbers.

The persistent weakness in the greenback gave investorsanother reason to look for an alternative and gold benefitted the most from it. A simple arithmetic shows that gold has risen by almost four times in value in dollars, while the US dollar has given up one-fifth of its worth since 2003-2004.

The dire debt situation in the advanced world, coupled with supply concerns emerging in the bullion market leaves little scope for any significant turnaround in bullion prices in the current year.

Let us explore a few areas which we believe would continue to attract investors to the yellow metal. Conventionally, gold tends to perform well in times of high inflation like the world is facing currently. However, this theory has been defied at times. Moreover, the current inflation is largely induced by high commodity prices and may peak out soon if commodities cool off. We rather bet on continued deteriorating global environment to support gold. We feel the downgrading of the US sovereign debt, which eventually will pin-up the safe-haven buying in gold as an irrefutable, trusted source of value.

FALLING CREDITABILITY OF THE US CREDIT RATING AND THE US DOLLAR

After European peripheral economies hogged the limelight for all the wrong reasons of late, it was US’s turn to follow suit. Though the European Union tried to resolve the ongoing debt issues in the euro zone by extending the maturities on the loans given to Greece and Portugal, the market does not seem too convinced as peripheral yields continue to jump.

The European Union draft stated that loans from the European Financial Stability Facility will be extended from 7.5 years to at least 15 years and the interest rate will be lowered from around 4.5% currently, in the case of Greece and Portugal, to around 3.5%.

Amid the happenings in the euro zone, the US dragged itself almost on the verge of a debt default as it touched the national debt limit of $14.3 trillion. However, the US House of Representatives passed a last-minute deal to avoid a federal debt default. But this episode has dented the AAA status of the US sovereign debt.

Though the raise in US borrowing limit by $2.1 trillion came with a string attached in the form of $2.4 trillion federal spending cut over the next ten years, this was simply not enough for the US government to avoid coming under the scanner of rating agencies.

The fiscal consolidation charted by the US Congress falls short of what would be necessary to stabilize the US government’s medium-term debt dynamics. About $1 trillion will be cut immediately from government spending, with a further $1.4 trillion to be agreed by the end of the year.

Nonetheless, the recent developments put the US in the clan of nations having over hundred percent debt as a percentage of the GDP. In the short-run, the implications of this might not be that grave. But on a medium to long term, we are going to witness a different picture if the US does not put its finances in order.

Most Asian countries have considerable exposure to US treasuries in their forex reserves and it is quite likely that at some point in time they would look forward to rejigging their portfolios by cutting down on their exposure to this asset class. Moreover, the withering dollar would make it even more compelling for them to do so. In such a scenario, gold undoubtedly would be the favoured asset class.

INVESTMENT DEMAND - THE DRIVING FORCE

Investment demand in gold, which comprises of gold bars, coins and exchange-traded funds, continues to surge in the wake of growing uncertainty in the financial world, constituting about 40% of the total gold demand now. It is evident that a major chunk of the increase in the total gold demand is due to strong growth in the investment sector. Though demand from exchange-traded funds remain a little volatile on quarter-to-quarter basis, the demand for physical coins and bars continues to break new highs with every passing quarter and keeping the net investment demand quite robust.

However, on a rolling basis, the ETFs total gold holdings continue to soar, confirming an underlying upward trend. The collective volume of gold held by global ETFs is nonetheless in excess of 2,100 tonnes. The prevailing conditions would ensure that investment growth will hold firm in the coming quarters.

EMERGING SUPPLY CONCERNS

While on one hand, both jewellery and investment demand are showing an uptrend, on the supply side, concerns seem to be emerging from almost all segments namely mine supply, producer hedging, official sector sales and recycled gold.

Mine supply, which is the foremost and the biggest source of supply, has slightly increased in the last few years. But at the same time there has been a steep downward revision in net production in the current year, implying that the demand may outpace supply this year. Net producer de-hedging is likely to have a limited impact on supply for the near future as the global hedge book has declined to trivial levels. However, the de-hedging trend witnessed in the last four years may continue with a moderate pace.

Turning to the official sector, we witness a sharp increase in the purchase of gold among central banks and official sector institutions, while sales remain virtually non-existent. A trend seems to be developing where most central banks are restoring the prior balance between gold and currency reserves.

The central banks of emerging countries remain underweight in the holdings of gold, notwithstanding the recent purchases made by them. These central banks are likely to continue to increase their holdings of gold as a means of preserving national wealth and promoting greater financial stability. The supply of recycled gold is broadly stable or marginally declining as consumers across the globe have deferred their decision to sell existing holdings of gold in anticipation of higher prices.

OUTPERFORMING ASSET

Gold is the only asset class which has consistently fetched investors good returns in the last few years marked by extreme uncertainty, truly justifying its status as a safe-haven asset. Through both good and bad times,gold has endured. While market cycles go through periods of boom and bust, gold has maintained its long-term value after accounting for inflation.

Despite the fact that the Federal Reserve Chairman recently said that gold is not money, prudent investors and individuals who know otherwise will buy gold. Furthermore, the demand-supply dynamics convey that this could be one of the best performing years for gold. It is hard to put a number to where gold prices could be by the end of this year, but it’s worth would inevitably be higher than it currently is. Even a mark of $2,000 per ounce by next year would not be surprising.

FOREX-Euro up on German data as market looks ahead to Fed

mql4indonesia@gmail.com — Tue, 23 Aug 2011 13:41:00 +0000

 * Euro supported by German, Chinese manufacturing PMI

 * Expectations for more Fed easing boost risk appetite

 * Market watches Switzerland, Japan for intervention
 (Updates prices, adds comment, details, changes byline,
dateline, previous LONDON)

 By Steven C. Johnson

 NEW YORK, Aug 23 (Reuters) - The euro rallied on Tuesday as
better-than-expected German and Chinese factory data calmed
some concerns about slowing global growth.

 Commodity-linked, growth-sensitive currencies such as the
Australian and New Zealand dollars gained ground, too, while
the U.S. dollar was hobbled by expectations that the Federal
Reserve may soon act to stimulate a flagging U.S. economy.

 Fed Chairman Ben Bernanke will speak at the central bank's
annual retreat in Wyoming on Friday. At last year's speech, he
prepared markets for a $600 billion bond-buying program.

 Such measures increase the amount of dollars in the system,
driving down the currency's value, which helps U.S. exports,
and prompting investors to seek higher returns elsewhere.

 "The market is really geared up for the idea of additional
asset purchases to at least be put on the table when Bernanke
speaks," said Brian Dolan, chief strategist at Forex.com in
Bedminster, New Jersey. "I'm not sure it will play out that way
but that's what the market is betting on now."

 Europe's debt and banking crisis has had some investors
wondering whether the European Central Bank wouldn't soon have
to adopt some monetary easing of its own, but a solid German
manufacturing index eased some of those fears. For more see
[ID:nL5E7JM0VJ].

 European shares rose .FTEU3 and the euro at one point
approached $1.45. It was last up 0.7 percent at $1.4460
EUR=.

 The German data, taken with a report showing China's
factory sector held up better than expected in August, helped
investors overlook a separate report showing a sharp fall in
German economic sentiment. [ID:nL4E7JM2D] and [ID:nL5E7JN0Q0]

 The Australian dollar rose 1 percent to $1.0501 AUD=D4 .
Strong Australian-Chinese trade links make the Aussie sensitive
to Chinese economic data. The New Zealand dollar jumped 1.2
percent to $0.8330 NZD=D4.

 "Asia has been the driver of global growth, so if Asia
stays strong that will really help global markets," said Steven
Saywell, head of FX strategy at BNP Paribas.

 INTERVENTION STILL ON RADAR

 The euro rose 0.5 percent to 1.1402 Swiss francs EURCHF=R
as investors were wary that the Swiss National Bank could
reenter markets to curb recent franc strength.

 The SNB has cut interest rates to zero, flooded the banking
system with francs and intervened in the forward market to make
returns on francs less attractive to potential investors.

 Some of that appeared to be working. In the options market,
implied volatility in euro/Swiss dipped to about 18 percent
from 20 percent on Monday EURCHF1MO= as tighter ranges in
spot suggested the recent SNB measures are taking effect.

 The dollar dipped 0.4 percent to 76.52 yen JPY= although
market players remained wary of yen-selling intervention by
Japanese authorities. The dollar hit a record low around 75.94
last week.

 Bank of Japan data suggested Japan sold roughly 4.5
trillion yen in currency intervention on Aug. 4, its biggest
one-day yen-selling intervention ever. [ID:nT9E7J2068]

 But the yen ended up rising back to levels seen before
intervention a few days later, thanks largely to hedge fund
buying, analysts said.

 "With a slight lag, rises in dollar/yen have been met with
yen buying by hedge funds," Citigroup analyst Todd Elmer said
in New York. "This build-up in long yen positioning and a
tendency among investors to buy on dips suggests that
intervention has thus far been an ineffective deterrent."
 (Additional reporting by Nia Williams and Naomi Tajitsu in
London; Editing by James Dalgleish)

WORLD FOREX: Yen Weakens Amid Japan Intervention Watch

mql4indonesia@gmail.com — Mon, 22 Aug 2011 10:33:00 +0000

Image via Wikipedia

By Andrew Monahan, Of DOW JONES NEWSWIRES

TOKYO -(Dow Jones)- The yen weakened against the dollar, euro and other counterparts in Tokyo Monday as speculation mounted Japanese authorities may soon conduct another currency market intervention, while an upturn in Asian share markets also dented demand for the safe-haven Japanese unit.

Japan's Finance Minister, who controls decisions on intervention, stepped up his rhetoric against the yen's strength Monday, saying recent "one-sided yen moves" have been accelerating. "We will not rule out any possible measure and will take decisive steps if needed," Yoshihiko Noda said.

A sharp drop in the yen against its peers around 0200 GMT raised eyebrows and underscored the market's recent volatility. Dealers said yen-selling by big overseas banks, not by the Japanese government, drove the move.

Market participants remain on the lookout for any government action, after the dollar marked a fresh post World War II-low at Y75.94 Friday. Pressure is mounting on the government to act, as the yen's prolonged strength threatens Japan's export-driven economy.

Short-term investors have accumulated large bets on the Japanese currency recently, amid continued turbulence in global financial markets. Hedge funds and other non-commercial investors had 47,348 contracts betting on the yen against the dollar in the week to August 16, up from 42,149 contracts in the week earlier, according to data from data from the International Monetary Market, a division of the Chicago Mercantile Exchange.

While such investors adjusted those bets slightly Monday, as Asian share markets turned up after initially falling, yen-positive, dollar-negative factors would likely persist, dealers and analysts said.

"In addition to (Japanese) margin traders' deeply rooted need to sell on rallies" in the dollar-yen, "Japanese exporters may lower the rate at which they've pegged orders to sell the dollar-yen as they are considering the end of the fiscal half year ahead at the end of September," said Citibank Japan chief currency strategist Osamu Takashima.

Recent falls in short-term Japanese government bond yields suggest, on the basis of a simple model, that the dollar should be around Y74.00, Takashima said.

At 0250 GMT, the dollar was at Y76.83, up from Y76.54 late Friday in New York. The euro was at Y110.46 from Y110.20.

The common currency traded hands at $1.4376 compared with $1.4396. The ICE Dollar Index, which measures the greenback against a basket of other currencies including the euro and yen, was at 74.042 from 73.990.

Interbank Foreign Exchange Rates At 00:50 EDT / 0450 GMT

                         Latest     Previous   %Chg   Daily   Daily    %Chg
                                    2150 GMT          High    Low      12/31
Dollar Rates

USD/JPY Japan            76.81-82       76.74-78  +0.07    77.20    76.56  -5.31
EUR/USD Euro            1.4374-76      1.4378-86  -0.05   1.4392   1.4362  +7.35
GBP/USD U.K.           1.6498-500      1.6464-74  +0.18   1.6508   1.6468  +5.71
USD/CHF Switzerland     0.7854-62      0.7902-10  -0.61   0.7904   0.7860 -15.96
USD/CAD Canada          0.9885-90      0.9883-86  +0.03   0.9918   0.9880  -0.60
AUD/USD Australia       1.0431-34      1.0402-06  +0.27   1.0440   1.0364  +1.94
NZD/USD New Zealand     0.8214-20      0.8178-84  +0.45   0.8232   0.8164  +5.39

Euro Rates

EUR/JPY Japan           110.41-46      110.01-44  +0.19   110.89   110.04  +1.66

Won leads Asia FX gains, wary of Franco-German summit

mql4indonesia@gmail.com — Tue, 16 Aug 2011 17:02:00 +0000

Image via Wikipedia

SINGAPORE: The South Korean won rose on Tuesday as rebounding stock markets and expectations that China will allow the yuan to appreciate more rapidly enticed hedge funds and real money accounts back into emerging Asian currencies.

Many investors remained cautious, however, before a Franco-German summit later in the day on the euro zone debt crisis.

Some market watchers had earlier hoped for signs of progress on further measures to quell the debt crisis from the summit between French President Nicolas Sarkozy and German Chancellor Angela Merkel.

Traders were particularly focused on whether the leaders would discuss the issuance of joint eurobonds, but officials in Paris and Berlin have said that topic was not on the agenda for Tuesday's talks.

Emerging Asian currencies are expected to suffer again if the summit disappoints global markets, especially in light of evidence that the European economy is rapidly cooling, analysts and dealers said.

German economic growth nearly stalled in the second quarter from the first, data showed, pushing down the euro, equities and Asian units.

"Without any form of a fiscal union, it will be difficult for any stop-gap measures to be workable in the long term. The key here is even if there is a eurobond, questions will arise on how this bond is going to be priced, and whether the ECB is part of it as well," said Suresh Kumar Ramanathan, regional rates and foreign exchange strategist for CIMB Investment Bank in Kuala Lumpur, adding emerging Asian currencies were susceptible to further declines.

"It is still too early to suggest that the current rally in AXJ FX is sustainable. The key event risk is Jackson Hole on Aug 26th. If (Federeal Reserve Chairman) Bernanke suggests more QE3 is in store, it will be time to engage on long AXJ FX play. Until then, the current rally does not suggest that risk is on again."

Emerging Asian currencies have clawed back some ground after steep losses last week on worries about the slackening global economy and debt problems in the euro zone and the United States.

But the economic and fiscal strains in the developed markets are expected to keep putting pressure on emerging Asian currencies, given the region's heavy reliance on exports.

"After the downgrade, growth risks in Asia escalated along with downward revisions to US growth forecasts and warnings of another recession. The forthcoming policy shifts could weaken the conviction for currency strength in selective Asian economies," Bank of America Merrill Lynch said in a note, referring to S&P's US rating cut.

On the other hand, renewed expectations that China will allow faster gains for the yuan are lending some support to emerging Asian currencies, though some doubt Beijing is willing to allow a more rapid run-up in renminbi, especially in light of the cooling global economy.

The yuan hit a fresh record high on Tuesday as the central bank kept fixing its reference rate at new peaks, indicating Beijing may be engineering a "mini-revaluation" of the Chinese currency, traders said.

"The China play probably has legs for one to two more sessions but I think (US Vice President) Joe Biden will not be in a position to persuade China to do anything they do not think is appropriate at this time, so do leave take profit targets in the next one-two days since we've already seen a decent move from last week's levels," said Kenneth Kan, head of emerging markets forex trading at Credit Agricole Corporate and Investment Bank in Singapore.

Still, many analysts maintain their bullish views on emerging Asian currencies for the longer-term, citing stronger economic and fiscal fundamentals.

Even though Asian policymakers are seen as less aggressive in policy tightening now that growth is easing, the region's interest rates are still higher than developed countries.

Standard Chartered said it is re-entering real money portfolios with a bullish outlook for the regional units, a day after it advised Asian exporters to raise their currency hedging ratio.

"We think Asia ex-Japan (AXJ) currencies will be among the prime beneficiaries of the asset reallocation process as the region's much stronger economic, balance-of-payments and debt fundamentals increase its attractiveness to investors," StanChart said in a note, adding it was significantly long the won, the Indonesian rupiah and the Indian rupee.

WON

The won rose on hedge funds' demand and as foreign investors turned to net buyers of Seoul stocks after nine consecutive sessions of net selling.But the South Korean currency gave up some of its earlier gains as importers bought dollars for settlements and local interbank speculators added dollar positions. Some offshore players also sold the local currency.

Investors remained reluctant to buy the won when it strengthened past 1,070.0, analysts and dealers said.

"USD/KRW is not free from a big trend, so we'd better be careful in short plays in 1,060s," said Jeong My-young, a currency strategist at Samsung Futures in Seoul.

Foreign investors bought a net 661.1 billion Korean won ($612.6 million).

Dealers wondered if the won's supplies linked to the purchases would support the currency further as foreigners' recent massive stock sales have not dented it much.

PHILIPPINE PESO

The Philippine peso slightly rose but non-deliverable forward-fixing related dollar demand limited the currency's gains.

Investors were also wary of France-German summit later in the day.

"Risk sentiment is coming back but market will still remain cautious ahead of the Germany-France meeting later today," said a European bank dealer in Manila.

SINGAPORE DOLLAR

Real money accounts tried to lift the Singapore dollar past 1.2000 per US dollar, but the central bank was spotted defending that level, dealers said.

The city-state's currency turned weaker on the intervention and a weaker euro.

Last month when the Singapore dollar hit a record high of 1.1993 versus the greenback, Monetary Authority of Singapore was spotted defending the 1.2000 line, according to dealers.

The Singapore dollar has been best performing emerging Asian currency with a 6.5 percent gain against the US dollar so far this year as investors sought the local currency in safe haven trades.

Inflows to the city-state pushed swap off rates (SOR) into negative territory. But some of them such as one-month SOR and two-month SOR returned to positive territory.

Forex Market Alerts : Forex - US Index, USD/JPY Flows: MoF Noda to consider more options on JPY rise; G7

mql4indonesia@gmail.com — Fri, 12 Aug 2011 10:15:00 +0000

Published at 02:21 (GMT) 12 Aug

Focus on any more Solo or Concerted/ Co-ordinated G7/G20 actions. MoF Yoshihiko Noda reiterates 1-sided FX moves are continuing (despite record solo intervention last Thursday and ongoing talks of covert intervention ahead of 76.25 lows). Want to cope with JPY rise with sense of urgency. May consider steps to cope with JPY rise in 3rd extra budget. Too early to conclude effects of last week's FX intervention. Will examine various options if 1-sided moves continue. Will act as needed based on G7 statement calling for close communication and joint action in the markets. On FX, USD/JPY dipping again, at 76.84-85, with Japanese exporters/ hedge funds selling. But talks of BoJ/MoF "agents/ trust banks, Japanese names" bidding huge at 76.25-30, and option barriers at 76.25/76.00. USD INDEX 74.71, eye 75 on back of firmer USD/CHF and lower AUD, EUR, risk aversion.WL

Shades of post-Lehman crisis in Asian market turmoil

mql4indonesia@gmail.com — Wed, 10 Aug 2011 01:21:00 +0000

Image via Wikipedia

SEOUL/HONG KONG — Asian markets on Tuesday endured one of their most volatile days since the height of global financial crisis three years ago as margin calls forced traders to dump risky assets before bargain hunters and state investors swooped in to stem hefty losses.

Sparked by a 6.7 percent fall in the S&P 500 Index overnight and signs that global growth was sputtering, Asia stocks tanked at the open and quickly spiraled lower on indiscriminate selling.

"I have butterflies in the stomach. It drove me crazy watching the market moves, they were so fickle," said Shawn Oh, a market strategist at Daishin Securities in Seoul.

South Korea's KOSPI slumped close to 10 percent at one stage, its biggest slide in two years, as brokers demanded investors sell stocks or stump up more cash to cover potential losses.

"Retail is very important in Korea, and huge margin calls have been kicking in, so there have been forced sellers for retail," said an analyst at a foreign brokerage in Seoul who could not be identified due to internal company policy.

Some Asian mutual funds were also seen dumping shares on expectations that investors will pull out what's left of their money in an effort to preserve capital.

The rout spilled into foreign exchange, commodity and money markets, at one stage thumping the Australian dollar down as much as 3 cents versus the US dollar and pushing it below parity for the first time in five months.
"It's very illiquid out there. We are still assessing the shock value of the fall in equities on fx and fixed income..." said the head of a desk at a European bank in Asia, as the selling peaked mid-morning.

"There is a broad sense of systemic risk here. This is completely uncharted territory."

Japanese foreign exchange margin traders took a bath as stop loss orders hit cross rates including the Aussie/yen and South African rand/yen.
Traders in Reuters' Dealing Room chatroom kept a stunned silence for the most part, punctuated with the occasional "nutty", "wow" and "what's going on?".

Back from the brink

Just as a total meltdown loomed, heavyweight investors, including state funds, stepped in to staunch losses.

Blackrock Inc., the world's biggest money manager, was one of those looking for bargains in the wreckage.

"Gold and bonds are doing really, really well and we're making profits on them and putting these into the asset classes that are getting cheaper and cheaper, which are definitely equities," James Holt, investment strategist at Blackrock in Sydney told Reuters in an interview.

Korea's state funds also stepped in to support the market, buying 505 billion won ($466 million) worth of shares, though that was dwarfed by selling by foreign investors as the KOSPI closed 3.6 percent lower.

Korea's bourse operator suspended program trading for five minutes to try to stem losses, while the country's top financial regulator imposed a three-month ban on stock short selling.

While policymakers from Sydney to Tokyo and Seoul kept up efforts to soothe jittery investors, rumors of emergency measures from the Federal Reserve Open Market Committee (FOMC) at Tuesday's meeting also played a part in halting the bloodbath, at least temporarily.
"Talk of government funds buying stocks in Korea,

Taiwan and Australia seems to have supported the markets. A lot of these indices are deeply oversold," said Tom Kaan, a Hong Kong-based director at Louis Capital Markets.

"But all eyes are on the FOMC right now for some sort of credible stimulus. If that isn't forthcoming, then I expect some real money hanging on to longs bailing out."

Volatility rattles
Australia's S&P/ASX 200 index , already down 11 percent over the past week, fell as much as 5.5 percent during the session before rebounding to close more than 1 percent higher.

"Not even in the global financial crisis did we see this extraordinary volatility," said RBS Australia's head of Sydney sales trading, Justin Gallagher.
In China, where the Shanghai Composite ended flat after falling as much as 3.5 percent on top of a 3.8 percent fall on Monday, retail investors were rattled.

"I was really scared by the slump... It's impossible for any investor not to panic," said Robin Lu, a 37-year-old who runs a translation business. Lu said he sold one-third of his 100,000 yuan ($15,500) stock portfolio on Monday.

"The tumble has changed my conviction on long-term investment, as the trend has obviously been changed for the worse," said Lu, who has been investing in stocks since 2006. "The market these days bring back memories of the market meltdown during the 2008 crisis, which taught me the importance of cutting losses decisively."

Not all market participants were fazed by the volatility. In Tokyo, which has endured a succession of natural and financial disasters, traders were more sanguine.

"It's not panic selling yet. You're not seeing all investors puking. It's very orderly selling in a sense," said a trader for a brokerage based in Tokyo who did not want to be identified.

Some players even welcomed the wild ride.

"These are great moves for bulls and bears today if you held your nerve and were prudent on the size of your positions," said Geoff Last, a market veteran of more than 30 years and head of Institutional FX at AXI Trader, an Australian forex broking firm. "It was amazing, crazy stuff... one remarkable day."

But with European markets giving up early gains and major indexes there falling as much as 6 percent, traders and investors were reluctant to call an end to the mayhem.

"We are getting a feeling that we are not out of the woods yet," said a head of sales at a Honk Kong -based hedge fund.

"We are advising our clients to stay out as much as possible and take profits on any rallies. This is not normal market behavior." — Reuters

“Is the U.S. Dollar on the Mend?”

mql4indonesia@gmail.com — Sat, 06 Aug 2011 01:40:00 +0000

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BY MICHAEL RADKAY

With the debt ceiling raised and more of the same out of Washington, what does that mean for the worth of U.S. Dollar in your pocket? Now I can get into a fundamental debate with you or give you the traditional democrat or republican response and express all the things I feel are right and wrong with the debt decision, but I feel there is too much talk. As people express their opinions, they always seem to get clouded with things that will eventually benefit the person delivering the opinion. We have heard politicians say what they believe and of course what they say, if implemented, will benefit their ideals. Debate is necessary in order to make a decision but the drama that the media fills our head with is enough to make it spin off. In the end media opinion doesn’t really make an impression on me, but what has always been important is when the decision makers finally make a decision.

I have been saying in past articles that I have never met an investor that gets involved in hopes of losing money, so recent price action is pretty revealing to help you with upcoming buy/sell decisions of your own based upon what you know . When price moves, somebody bought and somebody sold; a decision has been made!. Right or wrong becomes the only outcome when the game is on. What we get now is a big does of reality.

In trading there are two teams; bulls (buyers) and bears (sellers). Sports and competitions are divided in the same way. For that matter so is Washington with Democrats and Republicans. Step into a court room and there is a plaintiff and a defendant. Walk into a grammar school during recess and see the kids divided into two groups playing dodge-ball or kick-ball.

Life is a series of games; some are playful and some are serious. We all need something to do on this spinning rock so for the time being I am grateful that the supposed smartest people in the world (our U.S. government) came to their senses and didn’t screw-up (at least not totally yet) one of the greatest adult games on the planet; Our Economy! If we don’t have an economy, what would us grown-ups have to do? Maybe we could act in kind as it seems they have and decide who wins with a good game of dodge-ball with winner take all! I don’t mean to make this sound so trivial but I am actually a bit in awe as how immature our government on both sides played politics down to the wire. Nothing like a nice global adrenalin rush to get the party started! I realize they are in their position to make tough decisions that effect billions around the globe. Tough debate is necessary as both sides have a point, but with the world watching our US Government throw up a last minute desperation shot with seconds to spare, Come on!!

In the after-math the Bulls and the Bears that react and make decisions to buy or sell is much like pitting Jordan’s Bulls against Ditka’s Bears. Sounds like a SNL skit? Farley choking on a steak-bone having one of 5 heart-attacks and Jordan’s guest appearance dancing in a hula skirt. Ditka and the ‘Da Bears always seemed to win on that skit but I think players might be seeing a bright spot on the horizon for the Bulls to shine as the U.S. Dollar (USD) seems to be on a bit of a comeback post Debt Ceiling Drama. Higher deficits do not bode well for dollar strength but if spending and taxation get under control, a reversal may be in order and it may be what side-lined and battered USD Bulls have been waiting for. Since I personally can’t move the market myself, I have to rely on what we call the “Big Dogs” to help. The Big Dogs are governments, federal reserves, banks and hedge funds. They can move the markets and it is up to us as individuals to decide which team we want to join.

Now don’t take my word for it about a possible Bull USD run; take a look at how price was reacting leading up to the debt ceiling decision (July) and the couple of days since the decision was made (early August) – see chart. As an individual trader I have to step on the backs of the Big Dogs and go for the ride when I enter the market. I need them to move prices to where I desire. Who is winning becomes the real question. Timing is of course important and making a timely decision is equally important. The daily chart reveals before the debt ceiling decision that many currencies paired against the USD were strengthening. Leading up to August the AUD (Australian Dollar) was climbing vs. USD, the NZD (New Zealand Dollar) was climbing vs. USD, the EUR (Euro) was climbing vs. USD, the GBP (British Pound) was climbing vs. USD, the USD was falling against the JPY (Yen), the USD was falling against the CHF (Swiss) and the USD was falling against the CAD (Canadian). Sounds like Ditka and ‘Da USD Bears were routing Dollar Bulls. But take notice of the recent reversal post debt ceiling decision as we move into the first few days of August. Step back Norm as Jordan and ‘Da Bulls might have some life after all.

The reality is that the recent USD run is due in large part to the Swiss National Bank’s (SNB) rate cut and the Bank of Japan’s (BOJ) intervention to try and stunt strength to their respective currencies. The currencies that seems to not be tied as much to all of the carnage like the JPY and CHF are being sought as safe-haven plays. When comparing the two, it seems the CHF strength across the board signals the globe has been tagging it as supreme so far in 2011. There is always a ripple effect. The SNB acts, the US Government deals with debt and then the BOJ steps in with a move. Big Dogs act when Big Dogs act and we need to pay attention.

If the recent USD Bull Train comes up short and jobs data tumble in the coming months, investors will continue to seek the CHF and the JPY for safety. Now I’m not one for lengthy predictions and since a weatherman doesn’t forecast past a week, I always say, “Why should I?; so I will be adjusting on a weekly basis and riding the backs of the Big Dogs as the news and price shifts. If you do decide to jump on board the USD Bull Train, search for bottoms on your chart and as prices revisit those Big Dog stand-out lows, check your risk and make a decision!

Trade Strong, Trade Smart and Always Have Enough to Trade Tomorrow!!

Prosperity is at your fingertips! All you have to do is grab it!

Trading Commodity Futures and Foreign Currency (Forex) contracts may not be suitable for all investors. You may lose a substantial amount of money in a very short period of time. The amount you may lose is potentially unlimited and can exceed the amount you originally deposit with your FCM. The material in this newsletter and on our website is intended for educational purposes only.

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Is Wall Street Getting Too Pessimistic?

mql4indonesia@gmail.com — Thu, 04 Aug 2011 02:06:00 +0000

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A slowdown in the US economy and continued worries over fiscal policy in Washington has investors selling, but is the market overly pessimistic?

“We are shorting the S&P 500 and going long on the VIX just to hedge the volatility,” says Lou Gerken, hedge fund manager at Gerken Capital Associates in San Francisco. “The US economy and Washington are big risk factors and I don’t see that getting better until 2012. I don’t care about politics. I’d just like to see us get our fiscal policy in order and we are not there yet.”

The Dow, S&P 500 and the Nasdaq were all lower during intraday trade Wednesday. The S&P fell through its March low of 1,249, considered a support by many traders. The CBOE Volatility Index, aka the VIX, fell near 23.

Gold continues trading at record levels. US Treasury bond prices are rising as investors seek safe cover from a perceived slowdown in the developed world. The Swiss Franc has surprisingly performed as well as gold all year, but the country’s Central Bank lowered interest rates in an attempt to curb speculative capital flooding into the country’s currency. The franc has become a safe haven all year and rose 10% against the euro over the past two months as Europe’s debt crisis worsened. The Swiss Central Bank joins the US and Japan with their near zero interest rates.

Jose Wynne, forex strategist chief at Barclays Capital in New York, says that Central Banks around the world will do what they can to shore up the dollar by buying Treasuries or taking other measures to keep investors away from their currency.

“Short the dollar. Buy Asia,” he said Wednesday.

Audrey Kaplan, portfolio manager at Federated, thinks the market is getting way too down on itself. “I’m looking into 2012 now. The extreme pessimism doesn’t usually last for more than a few months. I think we are setting the stage for a very strong recovery. Look at German shares today, trading with multiples in the single digits,” she says about price to earnings ratios under 10 times forward earnings estimates. That’s usually a buy signal for value minded investors. “If you can get over the short-term pain, then now is the time to buy equities,” she says.

Now that Washington has passed legislation to raise the debt ceiling, avoid a default on US debt obligations, the market is focusing again on the economy — and whether or not a credit downgrade is on the horizon. In that case, borrowing costs would rise for US companies at a time when the economy is slowing.

A CNBC poll showed that 64% of respondents expect a US credit downgrade from its current AAA status to AA. The US credit is some of the safest in the world and has never been downgraded in its history.

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