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Breaking: Flash Crash hits the market

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Breaking: Flash Crash hits the market

#1
Flash crash hits the currency market

Massive forex moves

There are some incredible moves taking place in the FX market at the moment. Talk about a China slowdown his tipped markets at a particularly illiquid time and led to a wild frenzy of yen buying, particularly against the Australian dollar.

These are some of the biggest moves you will ever see. I'm sticking my neck out here but this looks like a one-off liquidity event and those tend to retrace. At the same time, these kinds of events do irreparable harm to market sentiment and will cause some brutal moves in the day ahead.

To me, this chart looks like it's the culprit, or at least part of the story, as AUD/JPY crashed down through cascading stops below the 2016 low, the 2011 low and the 2010 low to the worst levels since 2009.

audjpy-flash-crash.png
audjpy-flash-crash.png (37.93 KiB) Viewed 218 times

Whether it was this chart or not, this kind of drop raises some serious concerns about market functioning and whether liquidity exists or not.

The moves have clearly spread beyond this pair with some insane moves in the yen-against-everything.

Source: https://www.forexlive.com/news/!/flash- ... t-20190102
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Re: Breaking: Flash Crash hits the market

#4
FBI wrote:
Thu Jan 03, 2019 10:11 am
Start of the new year, big money stepping in I guess.
It's definitely not normal price action. Spreads widened to 70 pips on some pairs etc.

Expect to hear something from the Bank of Japan today as they respond to the FX flash crash

Japanese officials will not be happy about this

kuroda.png
kuroda.png (472.62 KiB) Viewed 207 times

You can almost guarantee there will be a report later saying that officials from the Bank of Japan, Financial Services Agency and Ministry of Finance have been calling around and trying to get on top of the moves.

The yield on the Japanese 10-year note also fell below zero for the first time since 2017.

I would even expect a statement from the BOJ saying that the disorderly moves and yen strength are unwelcome. The BOJ has been in an eternal struggle against yen strength and this is not the way they wanted to start off the year.

The headlines should weaken the yen slightly and talk of intervention will do even more. Heads up as it could happen any time in the next couple hours.

Source: https://www.forexlive.com/centralbank/! ... y-20190102
外国為替ニュースFundamentals! News Coverage

Re: Breaking: Flash Crash hits the market

#5
They complained about the low volatility since November. The volatility will come back this year they said. And where was me? Sorting and listening to podcasts.


Re: Breaking: Flash Crash hits the market

#6
Krelian99 wrote:
Thu Jan 03, 2019 10:37 am
They complained about the low volatility since November. The volatility will come back this year they said. And where was me? Sorting and listening to podcasts.
Haha yep sometimes it's a good thing to be sitting it out. At least you're not tempted to jump in.

One thing we can all learn from this is always stay out of the markets during the last week of December and first week of January. Sadly it took me years to listen to this advice and tens of thousands of dollars in losses :facepalm:
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Re: Breaking: Flash Crash hits the market

#7
Jimmy wrote:
Thu Jan 03, 2019 1:33 pm
always stay out of the markets during the last week of December and first week of January. Sadly it took me years to listen to this advice and tens of thousands of dollars in losses :facepalm:
noted & yes it is agreed............. as i said weird stuff always happens in january :shock:

Re: Breaking: Flash Crash hits the market

#8
it seems just beginning of reaction of flight to safe liquid heaven that is dollar,

that is what happens when people starts factoring in big economic slow down, when yield curve is so near to inverting on 3month to 10 year maturity

Re: Breaking: Flash Crash hits the market

#9
rijay wrote:
Thu Jan 03, 2019 3:05 pm
it seems just beginning of reaction of flight to safe liquid heaven that is dollar,

that is what happens when people starts factoring in big economic slow down, when yield curve is so near to inverting on 3month to 10 year maturity
You know your stuff Rijay. Yields are definitely playing an important role right now.

It'll be interesting to see how the market moves during the European and US cash trade sessions today.
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Re: Breaking: Flash Crash hits the market

#10
Jimmy wrote:
Thu Jan 03, 2019 3:26 pm
rijay wrote:
Thu Jan 03, 2019 3:05 pm
it seems just beginning of reaction of flight to safe liquid heaven that is dollar,

that is what happens when people starts factoring in big economic slow down, when yield curve is so near to inverting on 3month to 10 year maturity
You know your stuff Rijay. Yields are definitely playing an important role right now.

It'll be interesting to see how the market moves during the European and US cash trade sessions today.
all jitters have started coming in different markets as US 30 years bond is showing massive bond buying after hitting very long term trend line since 1998, and moving up after crossing its down trendline to upside.

that shows market is factoring in no more rate hikes, and lower interest rate environment, that follows on global slowdown and more worse is recession when fed will be forced to cut rates. looks too early to predict recession though at present.

picture on euro bund and japan bond long term chart is even worse.
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