Global Macro Trading Journal
- Thread starter Daal
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These guys know how to stick their fingers in the wind. SNB's foreign currency losses put Hildebrand in a position where he could be forced out for what his wife did (and I'm assuming this sort of insider shenanigans is SOP in Europe). No way Hildy could have been touched by this thing if the SNB didn't have those losses.
It's smooth sailing for now. The test comes if things get a bit rougher.
Yes in some cases, you have politics affecting fundamentals which affect price action and market dynamics. Soros reflexivity comes to mind. It has always been the case especially in currencies - where CBs have long had a tradition of impacting prices, be it coordinated G-7 intervention or other less traditional approaches. This has always been the case, just that over the last 3-4 yrs, Govt/CB direct/indirect intervention has increased much more compared to 80s/90s.
What is not the case? You mean to say there was more direct intervention in DM and CHF markets then also ? Will you please give an example.
I started trading only in 2009 and all the knowledge that I have about the markets before that - I have acquired from books/study and talking to senior guys. Things about FX that stand out and that I know are like Barings bank trader who sold tons of NZD in 85/86, Plaza accord, Bretton Woods, GBPUSD peg etc. - so basically major events.
Will be very interested if you can share what happened in 90s that gave you sleepless nights. Thanks
That intervention, official or otherwise, was much more frequent in the 90s. Bentsen in the US was talking down USDJPY constantly. He would make casual statements in obscure meetings that would move the yen 300 pips. Europe wasn't as noteworthy, but intevention globally was far more active.
Thank you very much. I had not heard about Bentsen before. Searched him and yes found him talking down U/J in an 'obscure' meeting
http://www.nytimes.com/1993/02/28/world/us-urges-nations-to-speed-growth.html?pagewanted=2&src=pm
"The official said Mr. Bentsen also remained concerned about the growing trade gap with Japan. Mr. Bentsen suggested recently that the solution might be for the yen to gain in value, making Japan's exports more expensive."
Quote from gmst:
Thank you very much. I had not heard about Bentsen before. Searched him and yes found him talking down U/J in an 'obscure' meeting
http://www.nytimes.com/1993/02/28/world/us-urges-nations-to-speed-growth.html?pagewanted=2&src=pm
"The official said Mr. Bentsen also remained concerned about the growing trade gap with Japan. Mr. Bentsen suggested recently that the solution might be for the yen to gain in value, making Japan's exports more expensive."
It's significant to me as I had sold a large notional position in spot USDJPY puts (jpy calls) OTC to a customer and was working the hedge. I had plenty of time to effect the hedge, so it's my fault. The only upside was that Bentsen (RIP) wasn't also an insomniac and talking in the Europe session.
The European CBs were also very active. Now it seems like a lot of talk and far less actual intervention.