Time to play some good defence

There were some excellent opportunities last Friday to enter the market and I feel that the ‘easy’ money has now been made and it’s time to play strong defence with risk events looming.

  • Political demonstrations in Europe (or are they riots) are affecting market sentiment:
  • Spain will be making some big announcements later today regarding budget reform and the potential need for a bailout:
  • The statement from the FinMins of Finland/Germany/Holland still needs to be clarified:
  • Overnight statements from the BOJ were a bit more aggressive than usual:
  • End of financial quarter asset rebalancing should ensure some heavy flows today.

The one factor which may lead to reduced volatility in the FX market is the overall lack of extreme positioning.

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