Choppy Markets - Market Review

By Gerard Mastra (BT)
9-26-2013

Choppy Markets were indeed the theme today was another day of watching waiting....and watching.
The financial markets are concerned if a  deal can be hammered out or if the U.S. government will shut
down on October 1, this has created 'choppy markets'. I have noticed since this U.S. budget has not been
completed we have seen many markets go sideways in chop.

In the traing room we discussed today why there may be market investors buying safe haven currencies
if you look at all markets you will notice stocks, commodities, fixed income and Forex are all trading  tight ranges.

Here are some important elements that must be considered when traing:

1.) U.S. needs either a budget deal by 9-30-2013 or the government will shut down on 10-1-2013

2.) A debt limit decision is needed by mid October or the U.S. will effectively run out of funds.

Treasury Secretary Jack Lew sent a congress a letter detailing the deadline.

The events that will take place in the next few weeks are crucial to Forex moves as well
as other markets.

Today we had good data on weekly jobless claims but markets did not really rally as they did in the past
on data this positive.

U.S. 10-year Treasury yields were closing at 2.6475%, off a bit from the
2.657% high yield, seen after the weekly jobless claims release, but not all
that far from the day's low yield of 2.623%, seen ahead of the data.

In Forex:

Markets did a great job of chopping, in the short term the market seems to expect the YEN to get
weaker. Last night in Asian session we had a nice pop that was over 80 pips within
1 hour. The Prime Minister Shinzo Abe is expected to make a decision about the
consumption tax hike early next week, ahead of Wednesday's European Central Bank
decision. It will be interesting to see how this plays out in the Yen pairs.

Tomorrow data is light, we have spending data (MNI medians at +0.4% and +0.3% )
I think the important data that may move the markets will be news from Washington regarding any
events taking place.

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In Choppy Markets us traders find things to do, so below I posted a video on a Tapering opinion I thought you may like: