Talking Points:
• The risk to the global yield chase borne of complacency grows as volume fades to historic lows
• This weekend is the Labor Day holiday which symbolically brings the Summer seasonal effect to a close
• Yet, where the S&P 500 is experiencing extreme low volatility levels, EURUSD's activity is building
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The culmination of historically quiet market conditions and the seasonal drain of Summer-ending Labor Day holiday are driving the S&P 500's volume to extreme lows. And yet, EURUSD is seeing its own activity levels build. This top-liquidity currency pair has seen turnover grow steadily over the past two months as bears have pushed the exchange rate to 12-month lows. Is the FX market immune to the broader financial market's malaise or is there something more kinetic at work? With the foundations of the financial market's complacency devolving, the FX market is highlighting activity that falls outside of the 'risk' theme - and it may even signal a change for sentiment ahead. We discuss the implications of volume in today's Strategy Video.
See volume behind the majors during the GDP and FOMC rate decision to gauge your trading approach using the free FXCM Real Volume and Transactions indicators.
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