Order Flow - Achieving the mindset
lol yea... where is ol' Carnegie.... I'm sure he doesn't give a crap anymore
Do you still think they might? they have the SNB conference this week, thursday I believe... but from what I'm reading it's doubtful...
I hope this run up is just a Chf 'beginning of summer' sale.--Warning from business leaders on parity is warranted
--Declining dollar, yen attraction helps Swiss franc
--Falling interest in German and French bonds may help too
By Nicholas Hastings
A DOW JONES NEWSWIRES COLUMN
LONDON (Dow Jones)--Parity between the euro and the Swiss franc is not so unthinkable.
A warning this week from two Swiss business leaders that this is the way things are headed may have brought some shock headlines.
Some Swiss exports may be fairly immune to exchange rates, but a lot of companies could still...
suffer if the franc continues to strengthen.
The problem is that flows into the Swiss franc are starting to intensify.
Not only have other traditional safe havens--the dollar and the yen--lost some of their attraction in recent months, but there is evidence that investors are even turning away from some European markets as well.
There is nothing new in the shelter the franc provides at a time of international uncertainty. And to start with at least, this financial crisis has been no different.
The fact that the Swiss economy has also done so well, with economic growth expected to come in at 2.1% this year, unlike many other major economies, has only made the franc even more attractive.
When the financial crisis initially broke back in 2007, the euro was trading up close to 1.70. The pair is now flirting with a break under 1.20.
Initially, the Swiss National Bank did launch a defensive attack through market intervention to at least stop the franc from rising too fast. But, the exercise had limited success and the central bank soon retired from the market.
The success of Swiss exporters in over coming a stronger currency has certainly made the Swiss authorities more tolerant.
However, a new wave of franc strength could now be developing.
For a start, there is the declining attraction of the other safe havens. A sustained U.S. recovery is proving much more elusive than expected and with the Fed still committed to loose monetary policy, the dollar is rapidly falling out of favor.
Japan's disastrous earthquake in March has also done little for the yen. As the country puts the pieces of its shattered economy back together again, the Bank of Japan will more likely contemplate further easing rather than anything else.
But, it is possibly shifting investment patterns in Europe itself that could add to the pressure on the Swiss currency.
In the last few weeks, worries of a Greek default have grown as euro-zone politicians and the European Central Bank have openly quarrelled over how to provide Greece with another bail out.
In the past, investors may have been keen to shy away from euro-zone peripheral debt, but were happy to keep on buying paper from the core.
According to flows monitored by Bank of New York Mellon, this too is now drying up with demand for German and French bonds disappearing in the last two to three months.
"Given that safe haven buying of this market had been a defining feature of the previous fifteen months, this suggests that a significant change of attitude might be under way," said one of the bank's senior strategists, Simon Derrick.
And if these flows aren't going into the dollar or the yen or even into Germany and France this explains why the franc continues to rise to new record highs against the euro and Swiss business leaders are bracing themselves for an even tougher currency ride ahead.
I think if we want this thread to be alive and free flowing we can do that j16 thing here too.
Post whatever you want to regarding the subject Order Flow, if a new comes and gets confused, just tell him to read first 300 pages + Finding clusters of stops (thread) + DS's posts, and then come back again.
I am sure he will do fine.
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