FX Notes of Interest - Aug 25

25 August, 2009 by Stephen Leahy

Boston Aug 25 08:17 EST

CFTC CFTC The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss Read this Term Commitment of Traders Reports show continuing build up of short EUR positions in the futures markets. We believe this to be a confirmation of the shifting sentiment indicators we first highlighted on August 13 (www.backbayfx.com/blog.php)

The Financial Times has a great piece in the Lex column about Global Interest Rates. Which country's central bank will be next to increase rates (Israel just did)? The FT notes Norway may be next which agrees with our long-standing belief that NOK will be the new long side of the carry trade in years to come. The question remains....which country will be the funding side of the carry trade?

The Shanghai Index, which we have been watching since early August, had an interesting day today. After a brutal start to the day, the last hours of trade were strong and might have been the confirm of a bottom to the August sell off. The previous low was tested on an intraday basis and held. It seems like the 2,800 level is the support line that needs to hold for China's foremost equity index to begin a renewed climb.

Stay Nimble!

Stephen Leahy

Back Bay FX Services, LLC

www.backbayfx.com