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Forex Key News & Comment Ebook

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					Wednesday 20 January 2010                             www.blackswantrading.com

Key News & Comments
 Greek government bonds tumbled, led by two-year notes, after European
   Commission President Jose Barroso said the region’s economy is at a “delicate
   moment.” (Bloomberg)
Note: Below is a Greek vs. German Bund 10-yr bond spread chart we showed you in
Monday’s Curency Currents; we were expecting the euro to follow…it has and is being
punished this morning.




   The China Banking Regulatory Commission said it hasn't "specifically" told banks to
    suspend lending in January, but a report that it had asked several banks to stop
    issuing loans helped to send equity markets tumbling. (WSJ)

Note: Below is the chart of China’s Shanghai index; we showed this chart in Currency
Currents last Thursday and said…a divergence was building…bada bing, bada boom…
…this is a divergence that seemed to be validated by the fact the Aussie (a Chinese
sattelite country) couldn’t make a new high on very good ecnomic news lately…

AUDUSD Daily:




Black Swan Capital’s Currency Currents is strictly an informational publication and does not provide personalized or
individualized investment or trading advice. Commodity futures and forex trading involves substantial risk of loss and may not be
suitable for you. The money you allocate to futures or forex trading should be money that you can afford to lose. Please carefully
read Black Swan’s full disclaimer, which is available at http://www.blackswantrading.com/disclaimer
    Japan supports sending a "collective message" to China at a G7 meeting next
     month to allow more flexibility in the yuan, a government official said on
     Wednesday. (Reuters)

Let’s look at what the euro has done against the US dollar compared to what the
Chinese currency has done since the last dollar bear market began. Below is a percent
change chart with the starting date June 1, 2002. As you can see, the euro (purple) has
gained 54% since that time; while the juggernaut of global growth from China—the
yuan—has moved about 0% since that time. Thus, the euro has appreciated about 54%
against the Chinese currency too.

This is what we call a “euro mash.” Europe is getting squeezed on the currency front by
two of its largest trade competitors—the US and China. Ouch! I hope Mr. Sarkozy
doesn’t see this chart.

EURUSD vs. USD-CNY % change based on 6/1/02 starting date:




                                               EURUSD (euro % chg)




                                                                              USD-CNY (yuan %
                                                                              chant))




Black Swan Events:
Today, 4:30 p.m. ET: Live webinar courtesy of the International Securities Exchange; Black
Swan will present on the topic of: Intermarket Relationships and Why It Matters to
Currency Investors; please click here is you wish to attend.




Black Swan Capital’s Currency Currents is strictly an informational publication and does not provide personalized or
individualized investment or trading advice. Commodity futures and forex trading involves substantial risk of loss and may not be
suitable for you. The money you allocate to futures or forex trading should be money that you can afford to lose. Please carefully
read Black Swan’s full disclaimer, which is available at http://www.blackswantrading.com/disclaimer
Friday January 22nd: Black Swan Capital Presentation at the 2010 World Outlook
Conference, Vancouver. The topic of the talk: The US$ Holds the Key. If you wish to
learn more about the World Outlook Conference click here.

Quotable
“The UK recovery is likely to be sub-par, but it would be unwise to write off the
prospects for a stronger recovery. However, assuming a sub-par recovery, monetary
policy tightening is unlikely before the end of 2010. What happens to monetary policy
will also be substantially affected by what happens to the fiscal outlook (with the
election a major complicating factor). On fiscal policy, we continue to think that more
needs to be done than on the existing government's plans. Debt issuance will remain
enormous in 2010-11, and without Bank of England buying there will be a shift in the
balance of supply and demand. However, we think that demand worries are overdone
and that worries about UK solvency remain significantly overdone. However, the (albeit
weak) economic recovery will ultimately ensure higher bond yields. The prospect of
higher bond yields is the main reason why we remain cautious on UK equities.”

                                           Morgan Stanley Economic Forum
Jack Crooks
Black Swan Capital LLC
www.blackswantrading.com
-----------------------
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Black Swan Capital’s Currency Currents is strictly an informational publication and does not provide personalized or
individualized investment or trading advice. Commodity futures and forex trading involves substantial risk of loss and may not be
suitable for you. The money you allocate to futures or forex trading should be money that you can afford to lose. Please carefully
read Black Swan’s full disclaimer, which is available at http://www.blackswantrading.com/disclaimer
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Black Swan Capital’s Currency Currents is strictly an informational publication and does not provide personalized or
individualized investment or trading advice. Commodity futures and forex trading involves substantial risk of loss and may not be
suitable for you. The money you allocate to futures or forex trading should be money that you can afford to lose. Please carefully
read Black Swan’s full disclaimer, which is available at http://www.blackswantrading.com/disclaimer