Forex trading talk 00: 00 GMT 19 March 2012

Trade Talk: What's Moving Markets continuous on Forex Forum Key Items: GB- CPI. US- Housing Starts/Permits.

Monday saw a light economic calendar and that left the markets up to their own devices wit prices driven by position adjustments and developments in equity and fixed income (bond) markets. 

Starting on Tuesday, this week will see several pieces of key U.S. housing data. A housing turnaround will be needed for a sustained improvement in the employment picture, but that might have to come further down the road.

Critical for trade is where funds are flowing. Notable recently has been JPY weakness which is unusual before the March 30 end of the Japanese fiscal year. Japan is closed Tuesday for a local holiday.

We are monitoring any signs of portfolio shifts in the U.S. out of bonds and into equities. On this score, after opening at 2.26% early on Monday, yields climbed to 2.36% by the end of day.

Check the Forex Forum over the day for an updated and ongoing discussion of current trading themes in the MARKET CHATTER continuous discussion thread.

Forex pairs vs 2-yr note spreads

Some traders focus intently on the Japan vs. U.S. 2-yr note spread (only the U.S. 2-yr moves much). 

COMMODITIES and Commodity Currencies

EQUITIES & INTEREST RATES

Bonds are a counter to risk trades because risk investments must be financed. When the cost of money moves up (higher interest rates), the return and allure of risk trades such as equities falls. 

See ECONOMIC CALENDAR for a complete list of future forex market events and consensus data estimates. Go to the forex forum for up-to-date market developments and technical trading ideas.