Forex Investment and Currency Trading

U.S. T-Bond

This looks like a classic blow-out top to the bull market in place since 1981 (27 years)
The surge into December last year in an already very mature market followed by one of the largest down months on record bears all the hallmarks of an explosive blow out top.
A decisive move below the 123 area would look to support that concern and suggest at least a return to the channel base presently close to 109. Such a development would suggest a yield north of 5% again.
How could this happen in a Quantitative-easing scenario???

If we are de-leveraging the excess of the [...]

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A number of smart thinkers have pointed out that the CDS market may be the real problem in the current financial crisis. CDS rates rise, credit sells off, banks don’t want to sell that credit at depressed market levels and hedge funds won’t pay over the market. Suggestions have included closing the CDS market down or regulating it to extinction. But why not, as the article below suggests, use the relative illiquidity of the market to policymakers advantage? Why doesn’t the Fed sell CDS protection in size? It would even take in some cash to build a few roads with.
 
Have [...]

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1. Policy Commitment: If affecting inflation expectations is key, then moves that commit the central bank to continue easing until the reemergence of inflation is widely expected are fundamental;
2. Currency: In small, open economies, the effects of quantitative easing can weaken the exchange rate, providing a buttress to economic growth. In the face of a global downturn or if local firms and households have large unhedged currency exposures, though, such measures can engender negative feedback;
3. Portfolio Balance: By altering the composition of assets the central bank acquires in undertaking QE — buying securitized assets for example — the bank can [...]

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The dollar firmed against major currencies this morning after wild swings yesterday on US Treasury Secretary Timothy Geithner’s comments on reserve currencies. The US dollar recovered from lows hit after Geithner said he was open to expanding the use of the International Monetary Fund’s Special Drawing Rights (SDRs). His comments were initially interpreted as an endorsement of China’s proposal this week to eventually replace the dollar as the world’s reserve currency with SDRs. However, the dollar regained ground after he said the dollar would keep its status as the top reserve currency for a long time. The comments opened a [...]

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