too much vol?

2

2cents

crazy the vol on $ pairs these last 3-4 weeks... i mean, what the hell was the mkt expecting tonite to justify such a move since bernanke's good words on monday???? hasn't trichet been abundantly clear for months??? not that i feel the move vs $ UNTIL monday was justified either but...

anybody looked at any aggreg monthly turnover stats on CME eFX, Reuters etc? wonder whether this is mostly because of added hedge fund liquidity and more aggro trading, or the opposite, whether liquidity has already diminished (due to BoJ moves against free money) significantly, hence the relatively wider swings for the period?

any thoughts?
 
I think the market was already long euro doll and when it broke the top of the 1.27 to 1.29 range it got further long.

It then popped back inside the range causing some longs to bale out. Trichet saying "following closely" rather than vigilant meant a hike before the Summer unlikely so euro tanked. (they have always hiked if Trichet has been vigilant but never hiked if he has just closely followed!)

The million dollar question is what now - I have to admit I am not sure and thankful I trade very short term. For choice though I think euro doll will fall further although I am very wary of yet another false break. The fall in eur £ also tends to make be believe the euro doll will fall further as I like it as a lead indicator of the bigger trend.

I accept this has not added much!

As for the original question - too much vol ? - no, its great!
 
yeah but the amplitude of the intra-day swings is insane... at least since monday this week we have a clear direction again though...
 
i am just re-reading this stuff that triggered some of those wider & more frequent swings starting end april http://money.cnn.com/2006/05/02/news/newsmakers/bernanke/
boy wasn't it obvious that rates going forward would be data-dependent, the fed's been saying that since dec last year...?

in any case that wasn't worth twice the vol we used to have in the months ago methinks... sthg else must be happening re overall liquidity / turnover etc... just because we hit record days (HSFXi broke 26 yrds in mid-may) doesn't mean volume is consistently getting higher... and i'd rather find out now that in a year-end recap...

guess there is a 'new fed chairman' effect, a 'summer is a-approachin' ' effect, a 'carry trade game over soon' effect etc but i wld quite like to take a look at the hard data... PeteHS if your reading this plse chime in! thanks
 
Quote from 2cents:

yeah but the amplitude of the intra-day swings is insane... at least since monday this week we have a clear direction again though...
More...
me still finds amplitude to be insane... even if its friday, month-end, summer etc...

Lon Eagle mate, was there any whisper number today ahead of Chic Purch, do u know?
 
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