Morning View:
Good morning from our wet and dreary Sydney office!
Stay safe!
Grexit Risk:
I keep banging on about it, but don’t get sucked into trading spikes on the back of headlines. If you read the word ‘Greece’ and you’re not looking at your Mum’s DVD collection then don’t trade it!
Last night as we head into the EU session, EUR/USD spiked down only to rally all through the US as traders realised that Greek risk is old news.
If you’re interested, the headline in question was that ECB staff are proposing to increase the ‘haircuts’ on Greek bank collateral that is offered in exchange for Emergency Liquidity Assistance from the Bank of Greece.
UK Trader Arrested for 2010 ‘Flash Crash':
The interesting story out this morning is that UK commodities trader Navinder Singh Sarao has been arrested in connection with the sharp spike down then up in the DJIA in 2010.
Sarao would ‘spoof’ (place fake orders that he had no intention of trading) the futures market by adding large orders on the sell side that he would cancel. These fake orders would increase the spread between the bid and ask price so that other traders would stay away from the best price.
You can read more by doing a quick Google search but this issue is nothing new or unusual. This happens thousands of times a day. To arrest Sarao is actually kind of laughable and just comes across as a massive scapegoating.
On the Calendar Today:
CPI data is the big release on the calendar today. The forecast is for the level to have stayed at record lows, putting pressure on the RBA to cut rates next month.
Tuesday:
AUD CPI
GBP MPC Official Bank Rate Votes
USD Existing Home Sales
USD Crude Oil Inventories
Chart of the Day:
I posted these GBP/USD charts yesterday in the Technical Analysis section of the Vantage FX News Centre. The descending channel on the daily chart caught my eye, especially the way price is stepping down between supply/demand levels.
GBP/USD Daily 1:
GBP/USD Daily 1:
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