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                                                                       Archives                                                                                                              21st August, 2006


Proposed change in Australian Foreign Exchange market timings
We recently came across an important news item regarding Australian forex market opening:

Quote
There has been much discussion over the past eighteen months of a proposed change to the Monday morning foreign exchange opening hours in Australia, which constitutes the start of "normal market conditions" for the global foreign exchange market.

The discussion has focussed upon a proposed change from the current market opening at 5 am Sydney time, to a revised time one hour later. On the 10th of August, 2006, the Australian Foreign Exchange Committee (AFXC) reaffirmed its view that a change was desirable; however, it also felt that the previously targeted date for that change of the 25th September 2006 was unrealistic. The principal reason for this delay is the need for market participants to have more time to assess the impact of the change on existing global documentation, with specific interest in the wording surrounding barrier options. The postponement of any change will give the AFXC time to consult further with all interested parties with a view to resolving any outstanding problems around this issue.
Unquote

Our comment:
5 AM Sydney time translates to 0030, Indian Standard Time, or half an hour after midnight. A change in market opening to 0600 Sydney, would translate to 0130 IST.

You can also take a look at a very interesting chart, which shows the level of forex market activity at different parts of a 24-hour day. Please click on http://www.page88.co.za/cr/fxrhythms.shtml

Observe that the busiest part of the market, from 0100 GMT (10AM Tokyo) to 1800 GMT (afternoon in America) corresponds to 0630-2330 in IST (Indian Standard Time). This implies that the major part of the global forex market corresponds to Indian waking hours, making India the sanest place to trade forex from.


PE Ratios and the Bull market
A bull market is generally defined as a market in which the prices rise while the bear markets are described as a period in which the prices decline. Intuitively, it would seem that PE ratios should expand during a Bull market, and should contract during a bear market. But is it so?

We have seen a big Bull market in global equities in the last 3 years. Here is a study that tracks changes in PEs in different economies during this period. The observations are counter-intuitive! Please click on http://tickersense.typepad.com/ticker_sense/2006/06/global_pe_ratio.html


Emerging Markets And the US FED
We have seen an interesting co-relation between the Emerging Markets and the US Fed Funds rate. The common perception is that a rise in Fed Rates is bad for emerging markets and falling US rates is good. The reality may actually be the opposite. Take a look at http://www.bcaresearch.com/public/story.asp?pre=PRE-20060811.GIF and be surprised.


Red Hot Sizzling China
Is the Chinese economy headed for a hard landing just like the SE Asian economies of Indonesia, South Korea and Malaysia in 1997? This columnist from Bloomberg asks China to take a lesson from history. Take a look at
http://www.bloomberg.com/apps/news?pid=20601039&sid=a0ooVrkNLyR8&refer=columnist_pesek


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Disclaimer: The above views are based on the latest available information. Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. While the views are proffered with the best of intentions, neither the author, nor the firm are liable for any losses that may occur as a result of any action based on the above. Global commodity and currencies markets are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.


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