War in ossetia influenced markets? | Forex Factory

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War in ossetia influenced markets?

  • #1
  • First Post: Aug 8, 2008 11:32am Aug 8, 2008 11:32am
This morning Georgia launched an offensive using armoured vehicles and aircrafts in south Ossitia. And today oil fell down from 118 to 114 per barrel, and dollar significantly rose against other currencies. Could todaymorning's offensive in ossetia influence the markets, or these events are not linked?
  • #2
  • Aug 8, 2008 12:26pm Aug 8, 2008 12:26pm
Early to know what effect. I had a similar thought, questioning if it had impact.
Certainly Russia is not exactly viewed any longer by western money as a safe haven growth area ruled by law.
Western money that was liquid would flow out of the region along with all the other yield chasing commodity money flowing from around the world back to the USD.
That is part of the larger trend.
  • #3
  • Aug 8, 2008 1:00pm Aug 8, 2008 1:00pm
http://www.dailymail.co.uk/news/worl...-fighting.html
TV pictures showed a convoy of more than 150 Russian tanks and armoured cars entering South Ossetia today. They were expected to reach the regional capital this afternoon as it was reported that the city had been 'almost totally destroyed'
  • #4
  • Aug 8, 2008 1:33pm Aug 8, 2008 1:33pm
Important thing is what will Russia do. Dont forget that major pipeline (by the way, build by europeans to cut european dependancy on russian oil) goes all over Georgia. I think this have chance to become global in some way.
  • #5
  • Aug 8, 2008 1:40pm Aug 8, 2008 1:40pm
Open pending short order USD-CHF


*******************************

Russia is being delibrately tied down on this front. China tied down with the olympics.
Ships and equipments from the past month/weeks war games and exercise are being re deployed to the Gulf.

The real war is coming or is it just a psychological war?
America - China - Russia - Europe will be getting back their petrol dollars from the past year selling arms.
  • #6
  • Aug 9, 2008 8:40am Aug 9, 2008 8:40am
This event has only the potential to escalate into serious international implications.
Russia views U.S. deployment of defensive missles in former eastern block nations as a compromise of Russian defense perimeter.
This is Mr. Putin flexing muscles in response.

I do not think Russia wants military conflict to happen on a larger scale at this time. Russia is demonstrating that they are capable and willing to act further if they deem it necessary.
This is a prelude to escalation if Europe or the U.S. pushes back too hard. However diplomacy should prevail as it is in no-ones interest to enlarge this matter further.
As we on this site cannot know what the military criteria is for direct conflict to occur between Russia, Europe and the U.S. all we can do is speculate on the matter.
I write this telling you the reader that this post is speculation based upon rational judgement. Certainly as the news breaks about this matter we as traders should keep aware of the situation in the event it deteriorates.

As traders it should weaken the Euro, and the Gbp. It might strengthen the Swissy (history of neutrality)

No body wants War in Europe
  • #7
  • Aug 9, 2008 8:54am Aug 9, 2008 8:54am
Oil should head north if the Caspian oil and gas pipelines get hit by either party. The US dollar will reverse and weaken when/if oil goes up. The USD seems so manipulated with that rally just before the conflict.
  • #8
  • Aug 9, 2008 8:58am Aug 9, 2008 8:58am
During times of international tension, capital moves towards safe harbor first. Yield based upon risk assessment is not as high a priority as saving ones own skin.
Just consider that idea when allocating your account to the market.
  • #9
  • Aug 9, 2008 9:03am Aug 9, 2008 9:03am
USD/CHF selling did not occur. CHF being the safe haven for centuries and the gold backing of the currency. So thats correct but I would say that did not happen here.
  • #10
  • Aug 9, 2008 12:14pm Aug 9, 2008 12:14pm
Quote
CHF being the safe haven for centuries and the gold backing of the currency.
CHF isn't backed by gold anymore. They sold their golds in the late 90's.
  • #11
  • Aug 9, 2008 1:22pm Aug 9, 2008 1:22pm
Eur/Chf or Gbp/Chf would be European capital movement within Europe.
Swiss bank secrecy is the attraction for private funds flow.
Flight to U.S. treasuries would also be an outcome. Might account for some of the Thurs. into Fri. stronger Usd
Either way the Euro and Sterling would weaken. If for no other reason then heightened anxiety.

Hopefully this situation will stabilize and this be the last post needed.
  • #12
  • Aug 9, 2008 3:02pm Aug 9, 2008 3:02pm
Quoting pippy le pur
USD/CHF selling did not occur. CHF being the safe haven for centuries and the gold backing of the currency. So thats correct but I would say that did not happen here.
But we did get selling of EurChf, although with such a massive drop on the Euro it would be difficult not to have that. The Swissy stood up rather well considering other European currencies were in free-fall.

The news here has been focussing on China and the olympic games. It has been a surprise to me to discover another conflict in that region.
Minesweeper target: 284
  • #13
  • Aug 9, 2008 5:50pm Aug 9, 2008 5:50pm
Thanks for the response. My view is that if it is a flight to liquidity, then funds would flow into US treasuries. If it is a global security issue, funds would flow to safe havens like swissy, precious metals, bunds etc. I do not think that the world views the dollar as a safety zone after Aug 07 market meltdown and the following commodity price hike from sovereign wealth funds capital flow. I'm asserting that the dollar, DOW and S&P rally is folly with this armed conflict going on. US/Israel prompting Georgia to attack on the start of the Olympics is all to contrived IMHO.
  • #14
  • Aug 9, 2008 9:12pm Aug 9, 2008 9:12pm
Quoting pippy le pur
Thanks for the response. My view is that if it is a flight to liquidity, then funds would flow into US treasuries. If it is a global security issue, funds would flow to safe havens like swissy, precious metals, bunds etc. I do not think that the world views the dollar as a safety zone after Aug 07 market meltdown and the following commodity price hike from sovereign wealth funds capital flow. I'm asserting that the dollar, DOW and S&P rally is folly with this armed conflict going on. US/Israel prompting Georgia to attack on the start of the Olympics is all to contrived IMHO.
Just more fuel to the fire of the carry trade. eur/jpy has started its death spiral carry trade meltdown

http://www.dailyfx.com/story/trading...239290636.html
Skype: heliosphan187
  • #15
  • Aug 9, 2008 10:38pm Aug 9, 2008 10:38pm
Quoting pippy le pur
Oil should head north if the Caspian oil and gas pipelines get hit by either party. The US dollar will reverse and weaken when/if oil goes up. The USD seems so manipulated with that rally just before the conflict.
What u supposed about pipelines happened. Georgian authorities anounced that oil pipeline Baku-tbilisi-djeihan was bombed yesterday by russain aircrafts. but wasnt damaged. At the same time Azerbaidjan authorities said that transit of oil through two georgian ports (batumi and kulevi) is temperory suspended.
  • #16
  • Aug 9, 2008 10:50pm Aug 9, 2008 10:50pm
Quoting Dirtybrown
Just more fuel to the fire of the carry trade. eur/jpy has started its death spiral carry trade meltdown

http://www.dailyfx.com/story/trading...239290636.html
EuR/JPY gona slide further ...??

But as Oil likeli to jump up..that will cause USD to slide...and bringing EUR up??

sonic
  • #17
  • Aug 10, 2008 12:12am Aug 10, 2008 12:12am
For the carry trade to unwind, obviously the yen has to get super strong. It seems to obtain new vigor everytime there is a major stock market crash and/or a major brokerage house is in trouble. I see the usd/yen topping out soon maybe 111.00, then back to parity 100.00 shortly after. The US elections always give the stock market a boost. So this yen strengthening scenario may take awhile longer but should happen by the end of the year.
  • #18
  • Aug 10, 2008 7:05am Aug 10, 2008 7:05am
Eur/Jpy carry trade relies upon a long term interest rate strategy and stability. Consequently volatile and totally unknowable events such as War are unsettling to the strategy. I would venture it is vulnerable and am looking for technical confirmation for a trade. This has the possibility of a big move in the price structure.
The caveat is that Russia is not invulnerable to Western European political pressure. This conflict should be containable. Russia's long term existence is not in the least threatened by the West, and Russia spelled "Putin" knows it.

I also think that since oil fell in the face of this occurence that the oil markets may be focusing on the prospects for global growth rather then supply disruptions. They might also not have had the time to digest this event into the market. The absence of an abrupt reversal in oil on Friday when the news was breaking demonstrates considerable weakness in the oil markets. Monday we will know better. When taking aim it is always better to know which way is the target.
  • #19
  • Edited 7:29am Aug 10, 2008 7:15am | Edited 7:29am
It may affect the Russian ruble if you trade it. (I don't)

Other than that, unless it escalates into a larger conflict involving many nations I don't see it generating much order flow
Private message me for a link to my order flow website.
  • #20
  • Aug 10, 2008 7:53am Aug 10, 2008 7:53am
There is plenty of oil out there. The energy agencies seem to know when a price is high enough to release a new, 'just found find' at,say $150 area. As in the Artic circle, just recently. For mine, its the dollar and corresponding stock market indices, that are the ones to watch. Those rallies started before the conflict. Either somebody got out of their long eurusd positions, or bought the up the dollar with continuing conviction (central bank). Maybe both but as you say, Monday will be interesting, to see if the bull run keeps going. I think its dollar clobbering time.
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