Twelve Themes of Christmas (guesses, wishes, and concerns)

Posted by Jack Crooks - Black Swan Capital

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“God bless us every one!” said Tiny Tim, the last of all.” – Charles Dickens

FX Trading – Twelve Themes of Christmas (guesses, wishes, and concerns)

1) The dollar has bottomed on a multi-year basis after a major test in 2009.

2) Interest rates are going higher as this recovery “normalizes” in 2010; we see 5% on the 10-year T-note before the year is done.

3) US job growth will be surprisingly strong.

4) There will be a crisis within the Eurozone late in 2010 that will shake the foundation of the euro as a single currency.

5) Asian-block currencies will breakout against the developed world majors and move higher.

6) Extremely tight intermarket correlations will finally begin to breakdown and currencies will be increasingly judged on both fundamentals and yield differentials.

7) Stock market volatility will increase as government backstops disappear. Stocks will initially get hammered on the broader realization the real economy is improving i.e. money flow.

8) China will continue to rock through mid-year, but at some time during the second half of 2010 it will experience a major financial disruption that will rock markets around the globe.

9) Gold sees $700 before $1,500 (Sorry Dad!)

10) South Africa begins to unravel politically (it intensifies for international consumption) and the rand gets hammered.

11) Russia makes another major incursion west, increasing its “buffer zone;” continuing to pressure Baltic and Central European Currencies.

12) Thank you for reading Currency Currents and putting up with our rants, raves, mistakes, bad calls, and curmudgeon-ness (I don’t think it’s a word but fits well here).  We hope we have shared some things good; we know we have received many things good from the amazing quality of people who read CC each day.  

Merry Christmas and Happy New Year!

Jack Crooks
Black Swan Capital LLC