The turbulent start to 2019 early this morning in Asia could be only the beginning of a very volatile year.
The first full trading day of 2019 concluded in an unexpected fashion. A relatively quiet trading session in New York got shaken after the market close as Apple downgraded its earnings outlook. The move reinforced risk-off sentiment and caused a four figure drop in the USDJPY pair in a matter of six minutes.
The Japanese yen crosses mirrored the move with the AUDJPY being hit the hardest. Apple’s message about a contraction in Chinese demand sent the company’s shares down by seven percent in after-hours trading.
Just after 10 PM GMT, during the New Zealand and Australian trading sessions in thin Liquidity the Japanese yen rallied from 108.80 per US dollar to 104.80 in about six minutes.
The move was exacerbated by the thin liquidity conditions at the time, but also by the massive amount of liquidation in AUD and TRY crosses. From a fundamental standpoint, the market’s short JPY positioning, Apple’s cut to Chinese demand and slowing PMI figures globally contributed to the move.
Reminiscent to 2016
The flash crash of the Japanese yen reinforced a somewhat forgotten rule when it comes to financial markets: anything is possible. The move was reminiscent to the GBP flash crash in October 2016.
The Japanese yen’s rally was the sharpest move for the currency in the past ten years. The Japanese holiday on Thursday might have also played a role as bids of options players protecting certain levels didn’t materialize.
In any case, if the first full trading day of the year offers any clues to the rest of the year, we could be in for a big spike in Volatility in 2019.
Cyclicals Favor FX Volatility Rise
Since February 2018, when the US stock market tumbled sharply over a couple of days to erase much of the Trump tax cuts rally throughout 2017, the first hints of the end of the expansionary phase of the economic cycle were put in place.
Today’s move of the Japanese yen crosses signifies that further market uncertainty is around the corner. Coupled with continuing stock market uncertainty, the risk sentiment indicators are signaling that we are close to the end of the economic cycle.
This part of the cycle is traditionally associated with increasing volatility and more unexpected events. The flash crashes that we’ve observed over the past several years have been traditionally linked to uncertainty.
The Chinese economic outlook, coupled with a divided US Congress and a significant dent to revenues of the largest company in the world are all signaling a shifting market outlook.
According to comments from TS in Singapore thin liquidity, poor data and edgy markets are at the core of the move.
Preventing an Algo Trading Mayhem
A number of respected analysts have been predicting a 1987-style stock market crash. The era of fast high-frequency trading has been advancing every year since. As a result, the magnitude of a one-day crash in the stock market could well be much more aggressive than over 31 years ago when the Dow tanked over 22 percent on Black Monday.
The increasing reliance on computerized trading has proven its central role over eight years ago when the Dow plunged nine percent in a matter of minutes. Brokers should be well prepared for more volatility this year and manage risks adequately.
The first full trading day of 2019 concluded in an unexpected fashion. A relatively quiet trading session in New York got shaken after the market close as Apple downgraded its earnings outlook. The move reinforced risk-off sentiment and caused a four figure drop in the USDJPY pair in a matter of six minutes.
The Japanese yen crosses mirrored the move with the AUDJPY being hit the hardest. Apple’s message about a contraction in Chinese demand sent the company’s shares down by seven percent in after-hours trading.
Just after 10 PM GMT, during the New Zealand and Australian trading sessions in thin Liquidity the Japanese yen rallied from 108.80 per US dollar to 104.80 in about six minutes.
The move was exacerbated by the thin liquidity conditions at the time, but also by the massive amount of liquidation in AUD and TRY crosses. From a fundamental standpoint, the market’s short JPY positioning, Apple’s cut to Chinese demand and slowing PMI figures globally contributed to the move.
Reminiscent to 2016
The flash crash of the Japanese yen reinforced a somewhat forgotten rule when it comes to financial markets: anything is possible. The move was reminiscent to the GBP flash crash in October 2016.
The Japanese yen’s rally was the sharpest move for the currency in the past ten years. The Japanese holiday on Thursday might have also played a role as bids of options players protecting certain levels didn’t materialize.
In any case, if the first full trading day of the year offers any clues to the rest of the year, we could be in for a big spike in Volatility in 2019.
Cyclicals Favor FX Volatility Rise
Since February 2018, when the US stock market tumbled sharply over a couple of days to erase much of the Trump tax cuts rally throughout 2017, the first hints of the end of the expansionary phase of the economic cycle were put in place.
Today’s move of the Japanese yen crosses signifies that further market uncertainty is around the corner. Coupled with continuing stock market uncertainty, the risk sentiment indicators are signaling that we are close to the end of the economic cycle.
This part of the cycle is traditionally associated with increasing volatility and more unexpected events. The flash crashes that we’ve observed over the past several years have been traditionally linked to uncertainty.
The Chinese economic outlook, coupled with a divided US Congress and a significant dent to revenues of the largest company in the world are all signaling a shifting market outlook.
According to comments from TS in Singapore thin liquidity, poor data and edgy markets are at the core of the move.
Preventing an Algo Trading Mayhem
A number of respected analysts have been predicting a 1987-style stock market crash. The era of fast high-frequency trading has been advancing every year since. As a result, the magnitude of a one-day crash in the stock market could well be much more aggressive than over 31 years ago when the Dow tanked over 22 percent on Black Monday.
The increasing reliance on computerized trading has proven its central role over eight years ago when the Dow plunged nine percent in a matter of minutes. Brokers should be well prepared for more volatility this year and manage risks adequately.
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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