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Man’s Best Friend?

At FXPIG we believe there is always something to say about the market even if ranges are narrow, techs are neutral and Trump isn’t on a tweet storm.

Liquidity. The trader's lifeblood. Don’t be misled into thinking it will always be there. Like your best friend, you will miss it terribly when it's gone!

The advent of tech-led innovation took banks (the suppliers of liquidity) by surprise. Their introduction of technological advances has always been slow, introducing new methods only when forced to.

This PIG lived among the bankers for a long time and saw the protection of voice brokers as almost parental in its severity. The first screen based broker was irreverently nicknamed “the toy” and was never expected to catch on. Now all banks are using platforms to trade, voice broking in FX is moribund and liquidity has gone through the roof.

The moral of the liquidity story is that when it’s there it’s great but when its gone its flash crash time. There has been a herd mentality developed as platforms have become the norm in liquidity provision. Everyone will provide liquidity until one doesn’t want to anymore then no one does.

Sellers trying to find bids see big figures dropping like Autumn leaves.

Remember June 23/24?

Thankfully “Black Swan” events are rare so overall market liquidity has improved, and this has led to the upsurge in retail traders.

At FXPIG we supply liquidity in all market conditions. No, we aren't superhuman, we just pride ourselves on building partnerships with our clients and the market.

So, back to the markets. Last week, the FOMC released the minutes of their latest meeting; the first since they hiked rates. Their discussions seem to have been more akin to a tea party than a meeting of the (supposed) finest financial minds in America. To pronounce that a rate hike in March will depend on the latest economic data betrays the legacy of Greenspan and Bernanke!

Advance guidance is nonsense if it relies on single month’s data. PIGs know, it’s all about the trend.

Trump had a tentative winge (for that is all it was) at the Chinese calling them Grand Champions of Currency Manipulation. Big words but they fall short of the currency manipulator charge that would actually force some action. The President is being characterized by being someone with a lot to say but a little short when it comes to actions. This week he will be addressing a joint session of congress. He will need to get off the campaign trail and start to enact a few policies.

Janet Yellen, Chair of the aforementioned FOMC, also peaks this week to a business men's convention and she will also need to produce a better indication of the Fed’s intentions or abandon her stance and revert to a more “distant” approach. You never know, the markets may quite like having the ability to second guess handed back to them!

We also have the release of Purchasing Manufacturers Indexes (PMI) in the U.K., U.S., and Eurozone. These indices provide a useful guide to manufacturing output and are one of the sole consistent indicators across all economies. A read above 50 is expansion, below 50 contraction. The U.K. is the most at risk of a fall recent readings of around 55 following the huge increase in input costs last month. This could easily follow through into PMI data but a contraction is highly unlikely.Finally, we are approaching the triggering of Article 50 of the Lisbon Treaty when the U.K. will formally give notice of its withdrawal from the EU. There is a lot of chatter about the pound falling once negotiations begin in earnest but this PIG is calling a bottom! The Government has promised the trigger by March 31 so expect a statement confirming this as soon as this week.

At FXPIG we believe there is always something to say about the market even if ranges are narrow, techs are neutral and Trump isn’t on a tweet storm.

Liquidity. The trader's lifeblood. Don’t be misled into thinking it will always be there. Like your best friend, you will miss it terribly when it's gone!

The advent of tech-led innovation took banks (the suppliers of liquidity) by surprise. Their introduction of technological advances has always been slow, introducing new methods only when forced to.

This PIG lived among the bankers for a long time and saw the protection of voice brokers as almost parental in its severity. The first screen based broker was irreverently nicknamed “the toy” and was never expected to catch on. Now all banks are using platforms to trade, voice broking in FX is moribund and liquidity has gone through the roof.

The moral of the liquidity story is that when it’s there it’s great but when its gone its flash crash time. There has been a herd mentality developed as platforms have become the norm in liquidity provision. Everyone will provide liquidity until one doesn’t want to anymore then no one does.

Sellers trying to find bids see big figures dropping like Autumn leaves.

Remember June 23/24?

Thankfully “Black Swan” events are rare so overall market liquidity has improved, and this has led to the upsurge in retail traders.

At FXPIG we supply liquidity in all market conditions. No, we aren't superhuman, we just pride ourselves on building partnerships with our clients and the market.

So, back to the markets. Last week, the FOMC released the minutes of their latest meeting; the first since they hiked rates. Their discussions seem to have been more akin to a tea party than a meeting of the (supposed) finest financial minds in America. To pronounce that a rate hike in March will depend on the latest economic data betrays the legacy of Greenspan and Bernanke!

Advance guidance is nonsense if it relies on single month’s data. PIGs know, it’s all about the trend.

Trump had a tentative winge (for that is all it was) at the Chinese calling them Grand Champions of Currency Manipulation. Big words but they fall short of the currency manipulator charge that would actually force some action. The President is being characterized by being someone with a lot to say but a little short when it comes to actions. This week he will be addressing a joint session of congress. He will need to get off the campaign trail and start to enact a few policies.

Janet Yellen, Chair of the aforementioned FOMC, also peaks this week to a business men's convention and she will also need to produce a better indication of the Fed’s intentions or abandon her stance and revert to a more “distant” approach. You never know, the markets may quite like having the ability to second guess handed back to them!

We also have the release of Purchasing Manufacturers Indexes (PMI) in the U.K., U.S., and Eurozone. These indices provide a useful guide to manufacturing output and are one of the sole consistent indicators across all economies. A read above 50 is expansion, below 50 contraction. The U.K. is the most at risk of a fall recent readings of around 55 following the huge increase in input costs last month. This could easily follow through into PMI data but a contraction is highly unlikely.Finally, we are approaching the triggering of Article 50 of the Lisbon Treaty when the U.K. will formally give notice of its withdrawal from the EU. There is a lot of chatter about the pound falling once negotiations begin in earnest but this PIG is calling a bottom! The Government has promised the trigger by March 31 so expect a statement confirming this as soon as this week.

lastest Articles

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Forex Today: Markets cheer hopes of US stimulus deal, election polls in focus
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Forex Week Ahead – Time running out for Trump
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Forex Today: Dollar finds its feet amid stalled stimulus talks, ahead of US data, EU Summit
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Forex Today: Dollar’s haven demand back in vogue amid stimulus delay, vaccine trial pause
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GBP/USD Price Forecast: Cautious ahead of key week
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Bitcoin Price Analysis: Three factors why BTC is going to surge
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Forex Today: Yuan slumps on China’s policy move, coronavirus risk downs euro amid light trading
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Forex Week Ahead – Risk events galore
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EUR/USD: One more possibility around year-end for testing of 1.20 – Danske Bank
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Gold looks to the upside ahead of Powell’s speech
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Forex Today: Cautious mood and “sell the fact” after Trump's discharge, stimulus news eyed
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Forex Week Ahead – Markets hate uncertainty
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EUR/USD Forecast: Euro attacks strong resistance, why this could be a fakeout
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Forex Today: High hopes for US fiscal stimulus boost sentiment, NFP hints eyed
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Forex Today: Dollar rises after an ugly presidential debate, US data, end-of-month flows eyed
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EUR/USD now looks to 1.1800 and above – UOB
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S&P 500: Three critical policy disappointments behind the correction – Morgan Stanley
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Bitcoin's mass adoption passes the point of no return
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Forex Today: Dollar declines on hopes for a US fiscal deal, ahead of presidential debate
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US Elections: A decisive Democratic victory to hit the USD – Nordea
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Gold: Bearish pressures mounting
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Forex Today: Dollar bulls take a breather amid an upbeat start to a Big week
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Forex Week Ahead – Let the debates begin!
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Bitcoin Price Prediction: BTC slips into “Buy the Dip” Zone
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Gold: Eyes on August lows of $1863 ahead of US PMIs and round two Powell
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Forex Today: US dollar’s haven demand in vogue ahead of a busy day
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Gold remains on track to test the August low of $1863
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EUR/USD Forecast: Bears now eyeing a sustained break below 1.1700 mark
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Forex Today: Dollar buoyant ahead of Powell, UK PM Johnson’s COBRA meeting eyed
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Gold Futures: Still room for extra gains
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EUR/USD Forecast: Further consolidation looks likely ahead of Fed speakers
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Forex Today: US dollar sags amid fiscal overhang, mounting coronavirus risks
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Forex Week Ahead – No ease up for Powell
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BOE Quick Analysis: Bailey blasts sterling with specter of negative rates, why more falls are likely
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ECB’s De Guindos: Euro exchange rate is fundamental for inflation
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Forex Today: Fed drives dollar higher, gold and stocks lower, BOE, jobless claims eyed
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Gold aims $1980 as focus shifts to Wednesday’s FOMC
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GBP/USD to surge to 1.40 by September-2021 – UBS
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Forex Today: Upbeat Chinese data boosts mood, Boris' bill passes first hurdle, Gold shines
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Forex Week Ahead – More stimulus on the way?
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ECB's Lane: Euro's rise dampens inflation outlook
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Forex Today: King dollar holds the rein amid cautious optimism, eyes on US CPI
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EUR/USD Forecast: Euro set to fall? ECB expectations may be overconfident
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Forex Today: Brexit in deep crisis, vaccine hopes resurface, all eyes on the ECB
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Brent Oil resumes its core bear trend
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ECB’s Muller: A timely exit from temporary emergency measures is important
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Forex Today: Vaccine trial halt exacerbates risk off mood, Brexit, BOC, and US fiscal talks eyed
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Gold Price Analysis: XAU/USD drops further and approaches $1,900/oz
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Bitcoin Price Update: BTC bulls ready to strike back once $11,000 is cleared
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Forex Today: Hard-Brexit fears pound the Pound, Dollar bid on US-Sino woes
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EUR/USD risks deeper pullback as 1.20 peak looks far
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Gold Price Analysis: Downside appears more compelling while below $1946 – Confluence Detector
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Forex Today: Dollar stabilizes in the NFP aftermath, Oil tumbles amid holiday-thinned trading
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Forex Week Ahead - Trump Closing the Gap
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Nonfarm Payrolls Preview: Fed’s policy shift to introduce vital noise
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Gold rebounds from weekly lows, turns neutral around $1945 region
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EUR/USD trims losses and regains 1.1850 post-US ISM
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Fed's Williams: Policymakers seek inflation that targets 2% over time
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Bitcoin Cash Market Update: BCH fork is inevitable as Bitcoin ABC team separates from the project
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Market Analysis
Forex Today: Dollar climbs back from the abyss, ADP NFP, Fed speakers awaited
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Forex Week Ahead – Bring on the Jobs Report
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Forex Week Ahead – Jackson Hole Goes Virtual
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Market Analysis
Forex Week Ahead - The focus remains on COVID-19, the Fed and Congress
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Market Analysis
Forex Today: Gold up, dollar down amid stalled fiscal talks, vaccine hopes, ahead of jobless claims
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Forex Week Ahead- Is the economic recovery stalling?
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Market Analysis
Forex Today: Dollar licking its wounds, gold gives ground, ahead of the all-important Fed decision
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Market Analysis
Forex Week Ahead – What more can the Fed do?
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Market Analysis
Bitcoin Market Update: BTC/USD hits a pause button before another bullish assault
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Market Analysis
EUR/USD Price Analysis: Potential correction ahead of further gains
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Market Analysis
Forex Today: China's payback weighs on markets, boosts dollar, PMIs, coronavirus figures eyed
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Market Analysis
GBP/USD: Technicals show bulls have the upper hand
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Market Analysis
Gold: Correction in sight after reaching nine-year highs
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Market Analysis
Forex Today: Dollar licking its wounds, gold shines, US coronavirus cases eyed after Trump's U-turn
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Market Analysis
Gold jumps to fresh multi-year tops, beyond $1820 level
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Market Analysis
Forex Today: EUR/USD sells the fact, Gold looking strong, Trump's coronavirus briefs make comeback
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Market Analysis
Bitcoin Market Update: BTC fails to live up to the status of digital gold
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Market Analysis
S&P 500 Futures Price Analysis: Bears retain control after rejection at falling trendline resistance
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Market Analysis
Forex Today: EU leaders can’t reach an agreement on the EU rescue fund
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Market Analysis
Forex Week Ahead – Focus remains on Virus Spread, Fiscal Stimulus, Rebounding data, and Earnings
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Market Analysis
EUR/USD continues to look at the 1.1495 March high
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Market Analysis
AUD/USD to remain resilient in the near-term
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Market Analysis
Forex Today: Dollar dominates ahead of EU Summit, updated look at the US consumer amid rising cases
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Market Analysis
Gold probes multi-day lows around $1,790/oz
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Market Analysis
EUR/USD Price Analysis: A test of 1.1420 appears closer
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Market Analysis
Forex Today: US dollar seizes control as risk aversion returns, a busy docket ahead
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Market Analysis
Gold to stay above $1800 fueled by lower real rates
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Market Analysis
ECB expected to keep rates unchanged
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Market Analysis
Forex Today: Vaccine, earnings optimism downs the dollar; eyes on COVID-19 stats, BOE’s Bailey
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Market Analysis
Forex Week Ahead – Bring on Earnings Season
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Market Analysis
Crude Oil Futures: Upside looks limited
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Market Analysis
ECB’s Lagarde: Economic recovery would be constrained, uncertain and fragmented
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Market Analysis
Forex Today: Gold eyeing $1,800, dollar mixed, as coronavirus, Hong Kong peg move markets
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Market Analysis
Gold Price Analysis: Holds steady above $1775 level, bullish bias remains
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Market Analysis
BOJ to project economic recovery in report next week – Reuters
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