For Forex investors, you may need to be extra careful in the future - as the world is about to enter the recession, the market volatility is likely to become more turbulent!
Financial calendarIt shows that from the beginning of this week for four consecutive weeks, the number of trading days in the world will be reduced, and Europe is about to usher in a series of public holidays starting from Easter. The Japanese market will also be closed for a series of holidays at the end of April.
And now it is at a time when financial market volatility is plummeting. In the stock market, the volatility index, known as the "fear index," is near its lowest level since October. according toDeutsche BankExchange rate volatility index, exchange rate fluctuations have dropped to a few years low. Even the pound has become more and more calm. After the UK has been postponed for six months, the traders expect that the pound will not fluctuate significantly in the coming months.
It coincides with the good and bad economic data in recent weeks, and the delay in the Brexit until October, the market is reluctant to act rashly.
According toIt is pointed out that as the number of trading days decreases, the number of traders remaining on the trading floor is also reduced. The possibility of a large increase in volatility in the rest of April may increase, even in the event of a market turmoil, if there is an accidental impact, even There will be a flash crash.
Among them, the rest of the Japanese market needs to be especially careful! From the end of April to the beginning of May, Japan will usher in an unprecedented 10-day holiday to welcome the new Emperor Deren. This is also the longest rest in the Japanese market for seventy years. The long holiday is likely to cause a flashback due to a liquidity shortage.
According to earlier reports, large JapaneseInsuranceThe company is taking steps to prevent sudden changes in the yen during the market. Since the flashback of the foreign exchange market during the four-day New Year holiday in Japan on January 3, investors' fears that the thin liquidity will cause sharp exchange rate fluctuations have intensified.
Rich Life Insurance stated that it may not buy stocks before the holidays, mainly focusing on hedging foreign exchange positions; it is difficult to respond flexibly to shocks caused by program algorithms or high-frequency trading, so it is necessary to raise the hedge ratio in advance to minimize risks. There is a manual to deal with such an accident;
In the face of the Western Easter holiday that began this week, Kathy Lien, general manager of foreign exchange strategy at BK Asset Management, said that in the foreign exchange market, Easter Week is always a "fun" week, and the first three trading days usually have a large number. Active trading activity, but then it is expected to be consolidating. This year may be different, as a series of important economic reports will be released on Thursday, so volatility may continue until then.Despite this, most markets are closed on Good Friday and Easter Monday (the US is only closed on Friday), so many traders will end their long weekend ahead of time, hoping to close or lighten positions shortly after the US retail sales data is released. .
(Article source: Global Forex Network)