01.16 The Fallout Continues – NZ FX Broker Shuts Down, US Futures and Asia Down

by John Galt
January 15, 2015 22:00 ET

The news tonight is dire with FXCM announcing a potential loss exposure of $225 million from the Swiss National Bank announcement (via Bloomberg):

“Due to unprecedented volatility in EUR/CHF pair after the Swiss National Bank announcement this morning, clients experienced significant losses, FXCM said in a statement dated Jan. 15. That ‘‘generated negative equity balances owed to FXCM of approximately $225 million.’’

Meanwhile Global Brokers NZ has shut down due to illiquidity as a result of the SNB action (via Marketwatch):

SYDNEY — New Zealand currency trading house Global Brokers NZ Ltd. said it would close its doors, making it a casualty of the unexpected decision by the Swiss National Bank to cease capping the nation’s currency.

Global Brokers said in a statement it could no longer meet regulatory minimum-capitalization requirements of 1 million New Zealand dollars ($782,500) “and will not be able to resume business.”

As Asian markets have opened mixed, sans Japan which has just had one hell of an ugly morning session down 2.81% as of 21:45 ET, the US markets are poised for one of the most interesting options expiration Fridays in recent memory.

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The pre-market indicators for US equity futures from CNBC as of this posting are not pointing to a very happy day in the pits or online tomorrow either:

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Despite all the news from Switzerland and Europe today and attempts to move the equity and bond markets with outside manipulation from central banksters, the 10 year bond continues to rally flattening the yield curve even further:

 

The problem with this particular upcoming session on Friday, January 16th is that Monday the 19th is a holiday and all US financial institutions are closed, including the stock market. Thus with this options expiration session, watch out for wild volatile swings which could trigger a massive sell off if 1960 fails to hold on the S&P 500 or a huge rally if the market climbs above 2019 with volume. Either way, if it is a high volume day with a market close below all short and intermediate term support levels, look for a sense of panic to develop over this three day weekend.

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