Market Code
Yesterday, we saw the first flash crash in the world’s most liquid markets – currencies. At 10.33pm GMT the Japanese Yen rallied 6.4% against the Australian Dollar within three minutes, breaking through resistance levels that had held for nearly a decade. Within the following hour, the Japanese Yen gave back almost all its gains and declined 4.9%. Ask traders what caused this flash crash, and nobody seems to have any clue what was going on. The moves probably were exacerbated by the fact that Japanese trading desks were closed due to a public holiday, but remember, we are talking here about two of the world’s most liquid currencies with an average $31bn worth of trades settled daily in that currency pair alone.
In the light of these developments, Mike Bird of the Wall Street Journal, together with some help from Bryce Elder, came up with a short dictionary of financial market terms and their true meaning.
Enjoy and have a great weekend.
Market code
Source: Mike Bird (@Birdyword)