Forex Investment and Currency Trading

Maybe it wasn’t effective, but Global Central Banks are finally coming around to understanding the picture, realizing its all black inside the abyss. Global Rate Cuts, Intervention just short of Nationalization in the UK, Injections of massive liquidity, Suspended Equity Markets in some EM countries, everything is on the right path - that’s the good news. The bad news is that interbank liquidity and USD Implied Yields are now higher than where we were pre-Global Rate Cuts. Still seeing spivvy banks pay up for dollars at any price you show them.  Vol mkts, equities, EM…total destruction, not that anyone needs to be reminded.
 
On the Tsys announcement (remniscent of the classic blowup of the LTCM trade), should support market liquidity and get repo-rates off the 0% bound and Tsys are appropriately selling off. Would be careful to try to buy Tsys in this environment as the tried-and-true “Flight-to-Liquidity” bid no longer holds. ECB’s overnight Auction went through at 11% today and even US banks are now having hard time funding themselves day-to-day. NYFR at 4.9% and 3mth Libor at 4.52% while 0*3s trading at 4.25% (nowhere close to 50bps reduction). If Stock don’t close down today, that would give some glimmer of hope. The mood is manic and the time is dire ..