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CME Hikes FX Margins: AUD, CAD, JPY, RMB Impacted
Barely has the USD/Renminbi (or RMB) contract started to trade on the CME and already the exchange decided to hike the margin by 18.5%. And not only: in a broad action across the board, the CME hiked margins in some key FX contracts, including Aussie Dollar, Yen, Canadian Dollar, Forint, Zloty, and the Koruna. In addition, CME hiked two Interest Rate products including EM and I3. So if anyone was wondering why the AUDXXX dropped after hours, now you know.
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Could these fuckers make it any more obvious that they are criminals?
Truly. It is analogous to the MOB hiking the vig by 20%. You always know you are dealing with criminals.
must... make... dollar... strong!
LOL. It is so obvious they trade for themselves and got raped by the dollar printing announcement. CME probably won't be around much longer.
This is an outrage!!! Where are the hikes for gold and silver?? I need to get some more physical on the cheap damnit!
The CME has been stocking up on gold and silver. They won't probably try to do anything to it until they unload.
Oh you can bet your left nut thats coming soon enough. Probably after Europe pulls another Homer next week
This is the same Criminals that screwed the likes of Gerald Celente by claiming they had $100,000,000,000 to make everybody whole,,,and what did they do on the MFGlobal shit storm...They ran for the tall grass these fuckers......that's fraudulent inducement Hey Duffy,, where's the money fuck face..... 3.2 billion missing/stolen.
Why would anyone want to do business with these criminals? How many times do I have to say it...... GET FUCKED CME!!
So is this to promote a stronger dollar, or is it to give cash to primary dealers so they can rebuild their segregated accounts that have been plundered.
Bingo!!!!!!! Do everybody truly think that MF Global was the only one using their clients money? No way, everybody was doing it and as I suspect there may be a few MF globals sitting on the sidelines barely holding on.
Looks like it's Fosters time.
you didn't think you could win, did you?
the zero sum economics at work will always lead to a kleptocracy.
http://expose2.wordpress.com
The CME knows something is going down in the markets this weekend. Another hedgie bites the dust?
Wouldn't surprise me... Im beginning to think we are closer to the credit crisis then we think... Bring on the Lehman event baby, this market deserves to die...
Unless we have mass scale debt forgiveness (not going to happen), the only way forward is mass debt default. The can has been kicked until it found a large wall.
Uh, there's a little thing called war too don't forget.
You won't behave yourselves? I hike your margins!
Credit Agricole files for chapitre onze.
I'm still getting used to HOPING that this sort of thing happens..but after that 15% drop in FAZ, bought 200 more at 42.50, then another 200 at 42.00 today, some negativity would be excellent :D
Ah if only it was the Giant Squid...
Fiat Money is dangerous and the Dollar is the number one problem ready for implosion.
The JPY is fine n' dandy. Couldn't be a problem there....
USD will be the landing strip for the next flight to safety.
Yup.
Nearly time for the equities implosion that follows the flight from risk in the FX market.
japan own's all [90%+/+] its debt, whereas amerika's houston,... we have a "Problem"!
Yes, but 25% of their population (and growing) is over 65. They have a severely negative population growth rate. Their culture is VERY xenophobic, which means immigrants aren't going to pick up the working-age slack.
Eventually, their bonds will have to be defaulted upon, and THAT will be the ultimate kick in the pants to all those "wize" savers who put their faith in government. I mean, you're not buying Treasuries, are you? Of course not. Because you know that at current rates (and the speed of Bernanke's printing press), it's a losing bet in real terms. The Japanese are indeed very frugal and should be commended for their lifelong saving, but it is where they parked it that is the biggest mistake.
one of their inside buddies must be caught on the wrong side of a trade. Gotta force liquidiations.... oh wait, I thought they only do that in the precious metals markets.. Gonna get killed because you can't deliver, no problem... SOS call and voila, hike margins and force contract liquidation. What a crooked frickin' wheel.
Can someone please translate this into English?? In the past margin hikes were done on Silver and Gold. I think the Tylers said this was done in order to stop traders from driving the price up and to make physical metal less attractive (for all sorts of nefarious reasons).
When they do it on currencies, what is the goal?? To make the other currencies less attractive so that the USD stays the go to money?
Discerning the goal might not be so certain an endevour, but much as with gold and silver the results are predictable. The value of those pairs will drop relative to the dollar.
huge FX volatility out of Asia. more so China. Selling currency and buying USDs, commodity currencies are now looking like they could dump hard i.e AUD, CAD. its a very bearish sign. when equities rallied this week and indust metals were sold. next week i would watch for hedge funds unloading AUD, CAD, copper positions
AUD and CAD are both commodity based currencies. A margin hike on those is a defacto hike on AU and AG.
if the chinese are dumping their currency, what are they buying apart from USD? gold will still out bid the USD. like in 2008, when the AUD went down 60% and gold was bought.
now if the hedge funds and others dump the AUD....
Some of those currencies, like the Forint, are becoming extremely volatile because of mass capital exodus and surprise moved by the central bank to fight it with sudden interest rate hikes. They may be expecting others to foolow suit, creating a dangerous Fx market and raising the risk of blow ups. They learned from MF Global that nobody's safe
The are trading RMB/USD, and not USD/RMB on the merc. Just saying.
yeah right so you see a sh*t load on rmb selling and the cme just rolls with it? the worst timing in the markets was the rmb hedge when 99% of china is selling.
china is the margin call from hell. the CME are protecting their a-holes
I think the AUD is going to hold up better than the others. The yield differential between the AUD and the US(hit)D is huge, this will lend it support until the kangaroos start to lower rates.
Not if there are heavy FX short positions in each.
i agree with this. the question is "is this real deflation this time or not?" The Bernank simply is not allowing for prices to deflate--even though we all know all of Wall Street's money center banks are flat broke! EXTRAORDINARY!
To your point Bernancke cannot allow deflation as there is no monetary tool that can address this condition - his entire thesis is to devalue the USD in order to maintain US interest rates at ZERO - each 25 basis point equals 140 billion USD in additional US interest expense - Bernacke is cornered and the US TBTF banks will maintain their allegiance to him provided he keeps the USD flowing, however, to usurp Bennie's term - transitory USD strength might not be such a bad thing going in Fiscal year end for TBTF banks as it would give a boost their balance sheet as well as assist others around the world holding USD denominated assets - then 2012Q1 when the employment figures cave due to temporary holiday employees being sacked - Bernackenstein enters QE3 & modifies Operation Twist buying US Mortgage Paper...
big ben is a dumb-ass, period!
no one ever wins the game of 'fire',... that is to say "Burning the Candle from Both Ends"
this is a reality of life - like it or not
Raising margins is a great idea! There's more client money to co-mingle and steal. Duh.
Marc Faber is looking like a genius right now! Will his prediction of a Chinese slowdown be correct? Considering the slowdown has been underway for months, yours truely would say yes.
the guy lives there, travels and sees the signs. he also made comments on the HUGE outflows of Yuan last mth or so.
the gold bugs should not be pissed. silver will unwind but we get economic/geopolitcal chaos via China, middle east etc. gold will be bid
It's OK with me if silver unwinds a little, because I'm buying a lot of it in one or two weeks.
We needed a lower CDN dollar anyways. Now our oil is worth more. and those Playbooks are flying out the door.
Playbook? What's that?
RIM, Canadian iPad.
Old company that used to make phones and opted to sell a closed tablet on a dead Palm platform in an open source world built on faster, less buggy software in some guy's basement. Andro...Andre...Andy...something....lol
Yep. Canda, bitcheaz. That's the best bet for those of us here in the norhtern midwest, once SHTF. I for one can get cozy w/ the queen -- better than the sleazy rat-bastards overtaking the states, yo.
So CAD, AUD etc will be dumped in order to load up on USD?
<que dramatic soap opera music>
fonzanoon
So CAD, AUD etc will be dumped in order to load up on USD?
Makes TOTAL sense to me.
TWO of the strongest currencies get dumped for the lower five precentile one...........Yup,purrrrrfect sense.
Well, will be a great time to load up on CAD, and the AUD.
No! Not the Zloty!! >:-[
Is this the 30-year interest rate swap they're referring to?
http://quotes.ino.com/chart/?s=CBOT_I3.Z11.E
Zloty may follow the Forint down the path to extreme volatility and surprise central bank moves to fight it
The so-called 30-year interest rate swap actually trades on the bond price, not necessarily the interest rate:
http://quotes.ino.com/chart/index.html?s=CBOT_I3.Z11.E&t=&a=&w=&v=dmax
compare:
http://quotes.ino.com/chart/index.html?s=PACF_TLT&t=&a=&w=&v=d12
Wonder how the bond auction went, can't find any news.
But currency volatility was the reason their central bank intervened, and is determined to intervene again if needed. Needless to say the market perceives weakness and central bankers would be begging for margin hikes to boil evil speculators
1/3 of public debt of Poland is denominated in foreign currencies. The debt is almost 55% of GDP; if zloty weakens significantly and public debt exceeds 55% of GDP, the governemt will be forced to cut deficit (at least the consstitution says so). If debt exceeds 60% of GDP, the government will be forced to produce a budget surplus.
WTF?
I thought these guys are doing everything they can to engineer a weak USD. Why would they try to weaken other currencies against it?
I thought these guys are doing everything they can to engineer a weak USD. Why would they try to weaken other currencies against it?
**********
I think it would have a strengthening effect on other currencies-at least temporarily-
If you were short the CAD or AUD and you knew a margin hike was coming-you would likely cover before the hike-
Both the CAD and AUD were looking ripe for shorting as China tips over-
JJ - Excellent assessment & if you are a central banker you do have concerns related to deflation...since AUD & CAD are 'commodity' currencies maintaining/appreciating values would support commodity prices...However, one possibility to strengthening the USD would be to support EU banks selling/holding USD based assets - additionally, Greece must receive the 8 billion Euros before 19 December to meet its maturing bond redemptions...Is there any existing 'voluntary' Greek bond holders unwilling to accept the 50% haircut?
All of them appearently by the stupidity of attempting to loan more money to bums. And all that haircut is covering is the interest on the debt itself. The quarterly interest.
Is there any way of predicting when and where margin hikes will occur?
send your resume to sellyoursoul@goldman.com
sure, tap the NY Fed's phone lines.
Hmmm, MF, LME, con-joinedco-mingled customer accounts, JPM. hmm.
THAT'S IT! I'M TELLING THE AUTHORITIES...oh right. never mind.
Tyler: You will be interested in this piece of news...
Portugal raids pension funds to meet deficit targets
http://tgr.ph/tcXExx
The small countries are paying in blood .
what makes you think that amerika hasn't already done the same - afterall, it takes 2years for a foia to get fed data,... if they can get full disclosure at all, and, once obfuscated by fed-speak jargon pending - kinda feel for gov't employees making 40%-50% more than private sector, but,... - oh well
Interesting pattern - if you review the CZK (Koruna), PLN (Zloty), & the Forint (HUF) versus the USD all of these currencies have returned to their 23 November price point after falling significantly when the CBs intervened...speculating here, but, as I understand it mortgages from these countries were denominated in Swissie & Euros...some bank or banks must be getting their ass kicked as I know many EU banks hold significant positions in US CMBS/RMBS paper as well & that they would love to unload to raise capital....if anyone is out there please critique - would be interested in other opinions...Perhaps EU banks with mortgage paper they want to unload is facing losses due to unlegged/poor hedging positions as banks have need to raise capital for liquidity purposes
Yes. Those countries have been plagued by EUR strength despite deteriorating economies and credit. All part of the plan to save the core and through the periphery under the bus. Hungary this week tried to stem capital flight by raising rates despite economy near (in) recession. Desperation. Will work for a bout a week.
In related news:
Ships stranded, crops in jeopardy, power shortages as drought hits eastern Europe Unusual drought triggers alarm across Balkans
A lack of rain has triggered the worst drought in decades for this time of year, dropping river levels to record lows and sounding an alarm in parts of central and eastern Europe.
Power supplies are running low in Serbia, drinking water shortages have hit Bosnia, and crop production is in jeopardy in Romania, Bulgaria and Hungary. The Czech Republic is at its driest since records began in 1775.
http://www.newser.com/article/d9rcg9302/ships-stranded-crops-in-jeopardy...
ahhh! the effects of chem-trails!
You bet effects of chemtrails....
Where I am in canada,there has not been a day in a long time now,where they have not sprayed heavily.
Most people do not still know it is even happenig.
the deadly mixture is now being added to all jet fuels! amazing how the public is not rioting to stop the poisoning!
http://www.infowars.com/chemtrails-what-in-the-world-are-they-spraying/
http://www.infowars.com/scientists-admit-chemtrails-are-creating-artificial-clouds-2/
Thank you for the prompt & very informative response - it is greatly appreciated CE -
Caviar Emptor
You sure their not mixed up with Texas?.
I am trying to figure out why mining shares were off huge today and financials were up big today. Do these margin hikes play into this somehow?
TLT up, mining stocks, down:
http://www.oilngold.com/analysis/research/interim-peak-in-bonds-coincides-with-rebound-in-mining-stocks-2011101219542/
there was a piece by gary north, today [lew rockwell.com via goldSeek] abt wtf the banksters, led by the chairsatan, have been sugar-plum up to, this week, currency-wize
if i understood him, the banks are looking ahead at the possible train derailments and are trying to protect themselves. from themselves...
here's the link: French Fried Banks
By: Gary North
here's a copy/paste: Ben Bernanke is in panic mode. The November 30 coordinated announcements of six central banks regarding their intervention into the currency markets was exactly that – coordinated. If you think it was coordinated by anyone other than Bernanke, you are out of touch with reality.
the intervention on nov. 30th, was actually a bailout of the american banks, in the guise of bailing out european banks! just look how well the US banks did today! all an illusion!
I can't figure out if this is a 5-10 year slow motion train wreck or is there a big event that triggers a collapse quickly. Hard to know.
Why is the State of Illinois considering giving the CME a tax break, especially since the CME dropped the ball on MF Globsl?
i'm positive it's got nothing to do with being in chicago!
ejhickey -- There have been discussions for many months at the CME's board of directors regarding relocating the CME headquarters. CBoT and CME to another state, due to the incredibly unfriendly business climate in Illinois. Texas, Georgia (presumably Atlanta), Missouri (presumably Kansas City), Kansas (Johnson County), Ohio (surprisingly to me), and Arizona have been among the states discussed.
And, true to form, the Illinois goobermint can only come up with an insubstantial tax giveaway to stop this, rather than removing a bunch of very costly regulations (that do not, btw, produce more than a pittance of revenue for Illinois).
Never have so many given so much to so few.
The ethics, morays, values, and rules are gone and so are we.
no, were not gone,... but they soon will be?
All this conspiracy theory stuff is dumb.. Interbank FX market is massive and dwarves the size of the futures market by a huge margin.. This margin hike might effect some levered retail accounts forcing them to post more margin but is pretty irrelevant to the larger fx markets
SP500 bull vs bear battle reverts to bearish bias after price action on Friday and more downside expected.
My long term indicators have continued to warn of US Dollar strength and EURO weakness and these signals have increased since 2009. The overdue dollar rally should be substantial.
http://stockmarket618.wordpress.com