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Is EURUSD Volatility About To Explode?
With the end of Operation Twist's USD volatility repression, fading LTRO benefits, and various event risks (from elections to sovereign refinancings and bank downgrades/collateral calls) occurring, the gap between EURUSD implied volatility and European equity implied volatility is becoming excessive. FX volatility is extremely low (complacency high) but relative to equities it seems to offer a low-cost-long-vol bet on the chance of a risk-flare occurring. The last two times this has occurred (in the last year), EURUSD implied vol has rapidly caught up to equity's risk - why not third time the charm?
Charts: Bloomberg
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When EUR volume catches up, what happens? Market down? Dollar up? Bonds up?
Third time is enemy action.
Tits up.
Somebody called tits ?
EURUSD = T1000.
"vol" in the above article/chart is "volatility" not "volume".
Your confusion is understanable, since "vol" most commonly signifies "volume". I suggest we use "vlty" or something like that when we mean "volatility" from now on, to avoid confusion.
Volatility.
something going on somewhere. dollars been defended ever since (un)employment release. realy volatile and now up on day by .20
this began prior greece rumour.. DXY been pushing lower resistence and today may have commited people to the idea we were going lower.. thats changed now and we see where we go from here.
i mean people do for some reason still prefer USD for safety so obviously it still haas some life in it
The DOJ hard at work. Go to lunch, is the instruction given to the rating agencies. Got Beer?
The political answer to a economic question - is their going to be volatility? Will the governments (US, EU, JAPAN, CHINA, ETC...) tolerate losing money? Nope. I would think not. Some goon squad guy will show up and say "you put your name on the paper or I put your brains on the paper". It took a long time for Rome to die AND they had BARBARIANS to deal with, now, not so much. But then again, I may be wrong and the shit hits the fan on Tuesday since Monday is a BANK HOLIDAY!! Just saying BITCHEZ!!!
Don't we have margin increases to factor into the fun?
Only if the Fed allows it. Everything in the markets feels like manipulation and control.
Euro about to break 1.30 headed south...
Not going to happen...at least not for for a while. China buys the Euro as soon as it hits anywhere near 1.30.
Put/call too high. Just about ripe for a hard-core ramp job in conjunction with the spooz.
Add This:
EU Political Event Risk Calendar
______________________________________________
Date Risk Event
5/6/2012 Presidential elections in France
5/6/2012 General election in Greece
5/6/2012 Schleswig-Holstein election in Germany
5/13/2012 North-Rhine Westphalia election in Germany
5/14/2012 Eurogroup/Ecofin meetings
5/31/2012 Irish referendum on fiscal compact
6/6/2012 ECB meeting & press conference
6/7/2012 Heads of State Summit**
6/10/2012 Parliamentary elections in France (1st round)
6/15/2012 Troika quarterly review **
6/15/2012 Greek Parliament to vote on fiscal austerity plan **
6/17/2012 Parliamentary elections in France (2nd round)
6/21/2012 Eurogroup/Ecofin meetings
7/1/2012 ESM starts to operate alongside EFSF
9/12/2012 Dutch Parliamentary elections
2013 Federal election in Germany
______________________________________________________
Source: Morgan Stanley Research **denotes uncertain
Thats a lot of horse shoes to toss. One of them might be a ringer. Maybe more than one, a lot more than one.
To bad it will all be manipulated into a foggy bottom myth.
And these are just the "white swans".
Not so fast Tyler. There is a robot called QE rumour machine - it triggers whenever SP falls more than 20 points, bringing USD to where it started.
A gradual deterioration in the collateral backing multi-cedulas
http://www.cnhedge.com/thread-4107-1-1.html
http://www.jinrongbaike.com/
"Which does make you wonder, if some other bond prices are now reflecting a “squeeze” premium rather than pure value."
Comedy gold. LOL
With low volatility in the EUR, a down draft looks iminent.
This pair well with the bullish count of the USD Index.
http://bullandbearmash.com/index/usd/daily/
Zzzzzzzzzzzzzzzz - wake me up when something actually happens.
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