Do you like “trading the news?” Then the new-news is any news about the bailout. That’s the big news – look for Fed statements, Treasury speeches, and especially a speech by the President which I would assume has to come in the next month. If it doesn’t it will just mean that we’re putting off a statement by the commander in chief of the economy. These statements and speeches will have huge impacts on the RPP’s – the Risk Proxy Pairs:
USD/JPY, EUR/JPY, GBP/JPY , GBP/CHF, USD/CHF
These are pairs that are prone to move a lot when news hits about the state of the world economy. A lot of risk is bundled up in these pairs: the JPY is all about the carry trade (you think that has gone away, but it hasn't quite yet fully played out); the CHF is about Gold, the world's hedge against inflation (which might not actually be a problem, as we'll be exploring on the radio show this week).
It’s mildly interesting to watch what happens to the US dollar after the Non Farm Payroll report. But what you will see after Trichet of the ECB announces the full extent of the European Economic Problem in April or May – that will make a Non Farm Payroll report look like the Wisconsin Cheese Index, which is a fake report I made up to prove my point. Actually Max made it up, and it’s the greatest fake report ever.
