FOREX TRADING STRATEGY JUN 10 - RECOVERY ON HOLD
These are the most important news of today. Check them out so you can choose the most suitable forex trading strategies.
Recovery on hold
Asian stocks were poised for a slump at the open today after US stocks went down on concern that the recent rally of risky assets has gone too far. Treasury bonds gained. The futures market in Japan and Australia has decreased, but little has changed in Hong Kong. The S&P 500 index also halted its rise in 2020 to drop below 1%. Treasury Bond yields fell to 0.8%, while the dollar recovered some of its previous losses. Oil rose ahead of inventory data on Wednesday and after Libya closed its top oil field again, shortly after reopening.
The stocks went through a ups and downs session, in which the excitement helped break the record of bringing an additional 21 trillion dollars into the global stock market. Most of it comes from retail investors who returned to the market when the stock rebounded. Now, major investors are hesitant to miss the rebound, as evidenced by Paul Tudor Jones saying that it is time for a "humble pie".
A risky bet
Kyle Bass will risk the hope of success on a currency trade that has "burned down" speculators for more than three decades. Dallas-based Hayman Capital Management founder is starting a new fund "to win, lose to zero" - bet on a collapse in Hong Kong's pegged currency. Bass, who is famous for betting against subprime mortgages ahead of the 2008 financial crisis, will use option contracts to leverage the fund's new assets up to 200 times. Although this strategy is designed to create superior returns if Hong Kong's currency drops against the dollar, investors will lose all their money if HKD remains unscathed after 18. month. Mr. Bass declined to comment.
SoftBank's Vision Fund is preparing to cut about 15% of its staff after reporting a record loss in the last fiscal year. Rajeev Misra, head of the London-based Vision Fund, has expanded the number of planned cuts in recent days to 80 employees out of about 500. The fund planned to cut about 10% of its workforce last month. SoftBank Group International is cutting about 26 employees from 230. However, spokesperson for Vision Fund and SoftBank Group both declined to comment.
Support for Cathay Pacific Airlines
Cathay Pacific Airlines has become the latest global shipping company to receive relief to overcome the coronavirus pandemic, when the company's president said plans to raise HK $39 billion (HK $5 billion) from the Hong Kong government and shareholders are needed to avoid collapse. The sponsored airline will sell HK $19.5 billion in preferred shares along with HK $1.95 billion of warrants to the government. In addition, the company also proposed raising capital with current shareholders of about 11.7 billion Hong Kong dollars. These plans must be approved by shareholders at a general meeting around July 13.
The airline said an entity connected to the government called Aviation 2020 Ltd. is also extending the loan worth HK $7.8 billion. The government will own 6.08% of Cathay's stake through Aviation 2020 after the agreement and there will be two observers on the board. The airline will cut executives' salaries and provide more unpaid leave for their employees, and the ability to cut jobs is possible.