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Key Reports (WSJ):
7:00 a.m. Mortgage Applications Refinance Index: Previous: -11.2%.
10:30 a.m. May 22 U.S. Energy Dept Oil Inventories
2:00 p.m. Apr Federal Reserve FOMC Minutes


"Doubt is not a pleasant condition, but certainty is absurd.”


FX Trading – Stocks and need for risk
I commented to a very smart and savvy friend via email yesterday: “Late move against the dollar today.”  His response: “Investors need/want risk.”  It is the type of response Luke Skywalker would have likely received from Yoda, in Star Wars.  I am still pondering the deeper meaning of “investors need/want risk.”  But do I really need to ponder?  Can’t I simply see it?  Absolutely! It’s called the stock market.

Yesterday I penned a piece to our paid up members highlighting the angst among some players in stocks who would like to see greater volume to validate this latest run. 

But instead of looking at this low volume move negatively, maybe I need to look at it from the need for risk side.  If there is big money still on the sidelines, and stocks do break above the recent intermediate-term high, the “need for risk” could likely be palpable as fund managers will not wish to be left behind. 

A the moment the commodity currencies, the first responders to anything burning hot like risk appetite, have been the big beneficiaries of this risk move in the stock market—the euro—has lagged, and for seemingly good reason as risk in Europe is high. 

But, returning to my Yoda-like friend’s comments, if investors want more risk the euro is something they will likely embrace, for it hasn’t seen the love shared with the other pairs.  But that love for euro will likely coincide with those still sitting on the sidelines.  So, we continue to watch stocks as a clue there may soon be a wholesale move against the dollar.