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Euro Shorts Surge To New Record High - Is An EC Margin Hike Approaching?
The trend of relentless shorting of the Euro currency in the form of non-commercial spec contracts, and as reported by the Commitment of Traders, continues for one more week. As of January 3, EUR shorts rose by another 9%, hitting an unprecedented 138,909 net contracts short - a fresh all time record. What is curious that unlike previously, when an increase in EUR bearishness implicitly meant a increase in USD bullishness, this time that is no longer the case as net spec USD contracts actually declined, and are trading at relatively subdued levels. Overall, this means that FX specs are not playing relative currencies off each other, but are piling into a global European short. Which leads us to the following precautionary observation: just like when a price collapse in gold is required, usually enacted by the reflexive relationship between futures and the underlying, in the form of a margin hike, we wonder how long before Europe, or even the Fed which most certainly does not want a strong dollar, directs the CME to hike EC maintenance margins by some ungodly amount. Because whatever works to keep paper gold weak will most certainly help to keep the dollar even weaker. And with a net drawdown of nearly 250,000 contracts from EUR highs in April to current lows, a EUR margin hike may have as profound an impact as QE, considering the massive amount of shorts currently holed up and demanding the collapse of Europe.
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Unicredit down over 11% today.
OOPS!
More than one way to crash the Euro.
Opened at 4.37, closed at 2.62? That's 40%.
Maybe I'm reading it wrong.
Yep, I'm seeing the same thing ... -41.47% on the day.
I guess it depends on which Unicredit symbol on which exchange you look up.
Down 11% today and down 37% in past three days as per Reuters:
http://www.reuters.com/article/2012/01/06/us-unicredit-shares-idUSTRE805...
Down 11.12% today as per Yahoo! Finance page: http://finance.yahoo.com/q?s=UCG.MI
Either way, not a good sign for the Eurozone or the Euro.
The Euro is simply a mirror image of the dollar, one goes up, one goes down. The dollar will have it's turn again soon.
Pandora style beads
IMO these representation of euro shorts are deceiving .... COT reports for other currencies are net long in particular AUD. The majority of the movement in the euro has actually been against peripheral currencies including sterling. Not so sure we'll see any large scale euro rally vs. the dollar ... more likely to see high yielders and commodity currencies fall vs. the euro and the buck.
CME needs to raise margin on OIL.
Fuck margins, people have to put down 100% of money
Time to go long.
If you look at the weekly chart on the EUR/USD...I think you might just change your mind about that. It should have bounced hard off of that 127.08. It did not.
No siree...that chart is one bad news story away from a complete breakdown, and I think we will see that next week. PERFECT time for S&P to downgrade Europe.
Agreed. Got dollars? Man, never thought I'd say that, but the facts are the facts. Deflation will come back with a vengence this year and there won't be anything the Bernanke can do about it. And yes, it does seem as though S&P likes to "pile it on" with their downgrades. Bring it!!
did you forget? up is down, short is long, put is call, boom is bust.
does this long euro etf lke FXE might be a good option here for short-term trading?
Yep, FXE is the one.
"...a EUR margin hike may have as profound an impact as QE..."
Well, isn't that conveeeEEEEnient. Especially for SATAAAN!
This advice is worth infinitely more than what most readers pay for it. A mere matter of days before the Fed pisses all over the "unwashed" speculators.
NWO "no likey" being forced to go poisin pill to save their Euro baby...
Have mercy! Doesn't the EU and Euro have enough trouble? Doesn't France have enough trouble with faulty banks, pending sovereign downgrades, and now this…
Europe Divided on Faulty French Breast Implants
http://abcnews.go.com/Health/Wellness/wireStory/uk-evidence-routine-remo...
Thousands of European product regulations and they left out boobs? Oh, wait...
Euro is about to fall below 1.27.
and no downgrades today?
time to go long fxe! with that many short positions, this will be a massive shorting covering.
Short euro and pile into the yen? wtf?
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