Holy sh*t!
- Thread starter Cutten
- Start date
Saham - nobody is complaining about the size of the spike, they are complaining about government embargoed market-sensitive information being released by a private news organisation in advance of the designated time, in complete contravention of the rules and regulations surrounding such release.
It is as if you gave sensitive information to your lawyer, and then he leaks it to the prosecution 2 minutes before you reach the witness stand. If you agree to withold sensitive information until a specified time, but then release it early, then that is wrong.
If the breach is done for the purposes of making a profit, then it becomes fraud, which is a serious criminal offence. People are complaining about the incompetence, and quesitoning the possibly criminal motives behind it.
Finally, the dollar/yen move you referred to was not at all unusual in size, compared to other fast moves in the FX markets. In mid-late Sep 03, the Yen rose 7 points in a shorter period of time. The Euro fell over 800 ticks in late Feb/early March 2004 over a shorter period of time, and the British Pound fell over 1200 ticks over a shorter period. In 1998, the Yen rose over 900 points in a single day! If you think 7 points is a shocking move, then I suggest you read up a little more on the history of FX movements.
It is as if you gave sensitive information to your lawyer, and then he leaks it to the prosecution 2 minutes before you reach the witness stand. If you agree to withold sensitive information until a specified time, but then release it early, then that is wrong.
If the breach is done for the purposes of making a profit, then it becomes fraud, which is a serious criminal offence. People are complaining about the incompetence, and quesitoning the possibly criminal motives behind it.
Finally, the dollar/yen move you referred to was not at all unusual in size, compared to other fast moves in the FX markets. In mid-late Sep 03, the Yen rose 7 points in a shorter period of time. The Euro fell over 800 ticks in late Feb/early March 2004 over a shorter period of time, and the British Pound fell over 1200 ticks over a shorter period. In 1998, the Yen rose over 900 points in a single day! If you think 7 points is a shocking move, then I suggest you read up a little more on the history of FX movements.
Based on watching the trading on Eurex, that really didn't look like people trying to get in and out pre-figure (as has happened on prior reports). The Bund sold off 140 ticks, going 10-20 ticks at a time, with volume around 20,000-30,000 contracts - that only happens when a deluge of market orders hits the market. There is no way that such volume would hit the market on a stop, or "getting in and out" pre-figure.
IMO it is obvious what happened. Reuters released the news at 14:28, and everyone with a Reuters sent market orders to sell. Then they realised that Bloomberg and other news feeds had NOT released the news, so now they are in a dilemma - they have shorted a boatload at low prices, but it looks as though Reuters release was a screwup. Sure, it could be the right figure at the wrong time - but given that it's out at the wrong time, maybe the figure is also wrong? So, they went to cover their shorts, because they had no idea if the figure was correct or not. This spiked the price back up. Then when the "official" figure came out, everyone sold again.
The key question is whether Reuters screwed up, or leaked deliberately. It is *probably* the former, but could be the latter. Either way, they should be banned from releasing US government figures for the next few months. They will then have an incentive to release information without major screwups.
You obviously aren't very familiar with the history of trading in advance of news. Plenty of people have been bagged by the Feds for similar offences. If the payoff is several million, what's to say some chump on $30k won't try it? Hell, they nailed a Goldman Sachs economist, a multi-millionaire, for a similar front-running scandal when the Treasury announced their 30 year bond auctions were stopping.
Plausable but the Bund break was clearly cleaner with no bounce. Over here prices came back hard at 7:29. Reuter's is in every dealer room in the world. If the news was right there on the wire at 7:28, I still don't understand why the U.S. collapse didn't start in earnest until several seconds past the half hour.