“God bless us every one!" said Tiny Tim, the last of all.”
FX Trading – Twelve Themes of Christmas (guesses, wishes, and concerns)
- The dollar has bottomed on a multi-year basis after a major test in 2009.
- Interest rates are going higher as this recovery “normalizes” in 2010; we see 5% on the 10-year T-note before the year is done.
- US job growth will be surprisingly strong.
- There will be a crisis within the Eurozone late in 2010 that will shake the foundation of the euro as a single currency.
- Asian-block currencies will breakout against the developed world majors and move higher.
- Extremely tight intermarket correlations will finally begin to breakdown and currencies will be increasingly judged on both fundamentals and yield differentials.
- Stock market volatility will increase as government backstops disappear. Stocks will initially get hammered on the broader realization the real economy is improving i.e. money flow.
- China will continue to rock through mid-year, but at some time during the second half of 2010 it will experience a major financial disruption that will rock markets around the globe.
- Gold sees $700 before $1,500 (Sorry Dad!)
- South Africa begins to unravel politically (it intensifies for international consumption) and the rand gets hammered.
- Russia makes another major incursion west, increasing its “buffer zone;” continuing to pressure Baltic and Central European Currencies.
- Thank you for reading Currency Currents and putting up with our rants, raves, mistakes, bad calls, and curmudgeon-ness (I don’t think it’s a word but fits well here). We hope we have shared some things good; we know we have received many things good from the amazing quality of people who read CC each day.
Merry Christmas and Happy New Year!