Sassa I think the weakness on our markets was due to the CPI data that was released today.
maybe another pre election rate rise coming, why i think it was due to this the aud shot up and the euro did nothing against the usd they normally move in tan dame but a rate rise here does nothing for the euro.
Sassa I think the weakness on our markets was due to the CPI data that was released today.
maybe another pre election rate rise coming, why i think it was due to this the aud shot up and the euro did nothing against the usd they normally move in tan dame but a rate rise here does nothing for the euro.
It took a while to react.The Nikkei has been tumbling faster.
Whatever is causing it, momentum has definitely turned this afternoon. Agree that a red day in the US could lead to further sell-offs tomorrow. Singapore and Hong Kong indices also falling off a cliff at the moment.
What's causing the sharp selloff in the XJO and Nikkei?
Traders are seeing good selling of the AUD/JPY and NZD/JPY by US funds ahead of some event risk in the US later today. The AUD/JPY has slumped below 103.00 after trading up to 103.85 earlier while the AUD/USD has fallen below the pre-CPI level around 0.8995. The market was long the AUD/USD before the Aus CPI and went longer after the number increased speculation that the RBA would hike rates on November 6. Longs are unwinding due to concerns that the rally on Wall Street this week will come to a thumping halt after Merrill"s releases their quarterly profit, which is expected to be a shocker and US Existing Home Sales reminds everyone how bad the state of the US housing market is.
Carry trades remains under pressure as early London traders enter
the market. Chatter over Merrill Lynch's Q3 earnings, due for release later
today is all the rage. Newspaper articles are putting the debt losses anywhere
between 6-14bln, much higher than Merrill"s previously indicated loss of $5bln.
Stock markets around the region have given up all of their earlier strong gains
and most now are well into the red. Whilst it may be a classic case of sell the
rumour, buy the fact, traders in the Asian time zone have basically squared
their positions believing the risk is too great after the negative reaction to B
of A results last week.
Standard & Poor's may cut the credit ratings of 207 Australian and New Zealand residential mortgage- backed securities as turmoil in the U.S. subprime market spreads to home-loan insurers.
It's the first time in five years S&P has put securities backed by Australian and New Zealand mortgages on negative ``creditwatch,'' said Kate Thomson, an analyst at S&P in Melbourne, said today. Placing the bonds on Creditwatch negative, which means a rating cut is possible within 90 days, may drive yields on the debt higher.
S&P lowered ratings on about $50 billion of U.S. securities last week amid criticism from investors and lawmakers for downplaying the risk of subprime bonds. The ratings service said Oct. 19 it may lower the credit rating of PMI Group Inc. and its Australian unit after the second-largest U.S. mortgage insurer posted a $350 million third-quarter loss as defaults increased.
``Australian notes will definitely be affected in both the primary and secondary market and some new issues will price higher as a direct result,'' said Warren Mellor, structured credit analyst at National Australia Bank Ltd. in Melbourne.
Mortgage-backed bond sellers are already offering higher yields on securities to entice buyers back to a market that stalled in August after BNP Paribas SA, France's largest bank, followed Bear Stearns Cos. in freezing withdrawals from hedge funds, triggering a liquidity crunch in the global credit markets.
Australian lenders including Calibre Financial Ltd. and FirstMac Ltd. last week sold mortgage-backed bonds at yields more than double the rate of previous sales, according to data compiled by Bloomberg.
PMI Rating Watch
Sydney-based PMI Mortgage Insurance Ltd. has the third- highest investment grade rating of AA and is one of the two largest insurers of Australian home loans used to secure bonds. The 207 home loan-backed bonds that may be cut are also rated AA and some were created as recently as this month.
Almost all of the mortgage-backed bonds with ratings below the top AAA level monitored by National Australia Bank are at least partly backed by home loans insured by PMI Mortgage, Mellor said.
``We are seeing an entire product range being affected by PMI and the impact on our domestic market is a direct consequence of the company's business in the U.S.,'' Mellor said.
Hi Kauri.
Can you say where these posts are quoted from...
Thanks
SevenFX
Hi Kauri.
Can you say where these posts are quoted from...
Thanks
SevenFX
This is the cause of the loss.
Asian exporter shares fell, erasing early gains, after the New York Times reported Merrill Lynch & Co. will probably add $2.5 billion more in writedowns in the wake of the U.S. subprime mortgage crisis.
Pls look at the news.
Another RED day tomorrow.
Cheers
This is the cause of the loss.
Asian exporter shares fell, erasing early gains, after the New York Times reported Merrill Lynch & Co. will probably add $2.5 billion more in writedowns in the wake of the U.S. subprime mortgage crisis.
Pls look at the news.
Another RED day tomorrow.
Cheers
gr,
I hope you don't believe everything you read in the news just because Bloomberg or CNN reported it. Financial commentators often invent reasons to explain why markets rise and fall. These reasons often appeal to the rational mind as we try to make sense of an irrational mechanism such as the stockmarket.
I'm not saying the the story you quoted is wrong, but don't be so quick to believe whatever the press presents as truth.
China is also going to get affected by increasing costs, due to its currency partially pegged to USD, and everything being in USD making them more expensive
Interesting what Warren Buffett said about Chinese stocks today-
Oct. 24 (Bloomberg) -- Billionaire Warren Buffett said investors should be ``cautious'' about China's stocks after the country's benchmark index more than doubled this year.
``We never buy stocks when we see prices soaring,'' Buffett said today in Dalian, northeastern China, where he's visiting a subsidiary of his Berkshire Hathaway Inc. ``We buy stocks because we're confident of the company's growth. People should be cautious when they see prices rising.''
It reminded me of an old hotel broker friend of mine."If you're going to buy a hotel,don't buy one that is a succes.Get one that needs building up.You buy it cheap and enjoy the windfall when you sell it."
The current events are only leading to devaluation of currency.. maybe its a political play to see who backs off first US or China .. US has always wanted China to unpeg its currency.. various negotiations didnt work, maybe this little trick will ??
..
What devaluation are you referring to, the USD?
Cheers,
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