The market was aware of commerzbank's problems last week (hence the loss in share value). The article seems a bit sensationalist and politically loaded, but that doesn't mean it won't have an effect, or that the problem isn't significant. I'm more concerned about Brazil just now.
Add to the mix that Commerzbank - the 3rd largest German bank (and German banks are big by our standards), is reportedly in trouble with bad loan problems. PS. a run on the dollar has been hotly debated lately among the chattering classes, with a further 20-25% decline expected (see current Barron's and Business Week). Remember the 87 crash and the then Treasury Secretary James Baker stance with the Germans on the dollar/Deutche Mark? He made it clear over the week-end preceding Black Monday that the US no longer would support a strong dollar. Right now our current account deficit and the prospect of war make the dollar very vulnerable to a sharp correction. 87 redux?
seems like the impending demise of the german superbank and the Nikkei might make the trusty greenback look pretty good by comparison.
I would construct it as a condor. Long dollar, long gold, short Euro's, short yen. IMO all global currencies are shit right now. Yea maybe greenback is brightest of the bunch(agh) but I think metals get explosive up move sometime in near future.
Between the frog tanker, the japs market, the bin laden rag heads, and the krauts banking problems, we krakers should have one tough trading day ahead of us! Oh, I forgot the banana's election.
Hmmmm.......... looks like the bulls are are going to put up a little bigger fight than i would have expected.
All the bulls are now dressing up as bears for halloween. Ps: As of 2:05am, futures sitting at 798.50. Looks like Monday may get ugly!
The USD has been weak dince May against the EUR, CHF, GBP, but over the past few weeks it has strengthened against the JPY. Today it broke out of a nice tight 4 day range of about 122.20 to 123.40, and rose to 123.80 very quickly. I bought the breakout and decided to take the quick profit. There remains a bit of overhead up to 124.20 or so.