This week’s financial spread betting update is now available and can be read by clicking here.
It’s been a few weeks since I last wrote an update for this blog as I have been away on holiday. During my break I have still been trading and running the LS Trader and LS Forex sites as normal but did not get around to providing additional updates for my blog. Now that I am back things should return to normal.
So, since I’ve been away a lot of interesting things have been happening in the markets, and most of them have been along the lines of what we have been writing about in recent updates. In fact, in my last update on this blog I wrote about the expectation that the US Federal Reserve would return with a new round of QE3 in one form or another and we did see that with the so called Operation Twist. This move has subsequently not been particularly well received by the markets, which have been sharply lower on the whole over the past few weeks.
September as expected turned out to be its traditional weak month with stocks moving sharply lower. Commodities also moved sharply lower with the prime beneficiary being the US dollar. As we have been saying for a while, although the US dollar is a terribly flawed currency, it is still the primary safe haven currency, due to its status as the world’s reserve currency, and the fact that the Swiss Franc and Japanese Yen, the other 2 safe haven currencies, have been weakened of late by intervention from their respective central banks.
This trend of money moving back into the dollar is something that looks set to continue as we will likely see considerable further stock and commodity weakness over the coming months. That’s not to say that the dollar will go straight up and the stocks and commodities will go straight down, as that’s not the way markets work, but it is to say that the likely trends ahead will be bullish for the dollar and bearish for stocks and commodities. In very early trading this morning, stocks are continuing lower and the dollar is ahead.
This week’s financial spread betting update begins with: It would be safe to say that fear has returned to the markets and that we are overall seeing a risk-off strategy being employed by many market participants and this is leading to many markets selling off sharply and entering bear market territory. The main exception is the US dollar, which as we have suggested recently would benefit from stock market weakness and its perceived safe haven status…….…continue reading by clicking here