The Son of Finance of the Great Age

  Chapter 789 Euro Consortium (1)

  Germany's unexpected move exposed the contradictions among the EU countries and aggravated the market's concerns about the euro. However, in Asian transactions, the euro variety has not always been the mainstream, so even though he has made a lot of money, Zhongshi still has to transfer his main force to the European market.

  The euro foreign exchange market is mainly concentrated in Europe and the United States. The exchange rate fluctuations between these two strong currencies determine the direction of the world economy. Therefore, most financial institutions in the world are involved in the two trading markets.

   "What's going on with the euro in London?"

  After reaping some profits in the Asian market, Zhong Shi quickly asked the traders, "What is the price trend of the spot EUR/USD, March forward EUR/USD, and short-selling EUR options?"

These three correspond to the spot, futures and options markets. The linkage between the three is very close, generally speaking, they fluctuate along the same trend, but once there is an abnormality among the three, it means that the market has Opinions diverge considerably.

  The London foreign exchange market is the largest foreign exchange market in the world, with a daily trading volume larger than that of the New York foreign exchange market. The 100 largest commercial banks in the world all set up branches in London to provide foreign exchange services to customers all over the world. In addition to multinational banks, there are about 300 designated foreign exchange banks with British licenses, countless foreign exchange brokers, and non-bank financial institutions operating foreign exchange business.

  In the London foreign exchange market, the most traded product is GBP/USD, followed by GBP/JPY, and EUR/USD ranks third. However, in the recent period, the trading volume of the euro against the dollar has grown by leaps and bounds, and has surpassed the pound against the yen to become the second largest trading variety in the London foreign exchange market.

   In the world's second largest foreign exchange market, that is, the New York foreign exchange market, the transaction volume of the euro against the dollar is the largest. However, due to the time difference, the peak trading hours in the United States have not yet arrived.

   "The spot price is 1.2377, the futures price is 1.2154, and the short selling option price is 0.0047 immediately, and it is still falling."

A trader quickly reported a series of numbers, "Because the euro exchange rate in Asia has hit a new low in nearly four years, this sentiment has also affected Europe. Just now, the euro has a small wave of rebound, but it may be affected by the Asian The influence of the aspect has fallen again."

   "OK, we are now entering the London market!"

  As soon as Zhong Shi gave an order, traders quickly changed their channels and entered the European brokerage channels one after another.

   "1.2368, sell one billion euros in spot, first test the reaction of the market!"

  For the European market, which is far deeper than Asia, Zhongshi’s strategy is not to test it slowly, but to drop a blockbuster as soon as it comes up to test the reactions of all parties.

  Although the daily trading volume in the London market can reach hundreds of billions of dollars, it is only about hundreds of billions of dollars evenly distributed to each product. Therefore, a single transaction of one billion euros is not a small sum even in the London market.

  Traders picked up the microphone immediately, looked for their familiar trading counterparties, and asked about the possibility of trading.

There is no fixed trading place in the foreign exchange market. This is because the main institutions of foreign exchange transactions are either commercial banks or non-bank financial institutions, which are completed by telephone and foreign exchange trading system. Ordinary people and ordinary institutions are not qualified to participate Come among them.

   Of course, these count as the main foreign exchange markets. There is no threshold in the OTC market, but because of the transaction volume, it cannot play a decisive role in foreign exchange pricing.

  Through the inquiries of its own traders and the matching of foreign exchange brokers, the news that Tianyu Fund wanted to throw away 1 billion euros quickly spread throughout the London market. However, Zhong Shi waited for a while, and many people asked if there was a possibility of raising the price, but there was no real opponent for the deal.

  But Zhong Shi was not in a hurry, because the price of the euro against the dollar was still falling, and soon the real-time exchange rate of the euro against the dollar came to around 1.2370.

   "Yes!"

   At this moment, a trader shouted loudly, "Royal Bank of Scotland, the price of 1.2368, wants our billion euros!"

   "Sell it!"

  Zhong Shi replied without hesitation, "It seems that today's downtrend has already formed, prepare more funds, and we will copy everything we did in the Asian market."

  The transaction amount and volume quickly appeared in the foreign exchange system, which naturally caused quite a stir. Under the influence of this large order, the exchange rate of the euro to the dollar quickly fell below 1.2368.

   "Another 2 billion euros will be released at a price of 1.2360."

  After the transaction was completed, Zhong Shi struck while the iron was hot, preparing to sell another two billion euros in spot.

"Oh no!"

   At this moment, a trader who was paying attention to the forward contract shouted loudly, "Look, everyone, the forward exchange rate is rising!"

   Everyone hurriedly switched to the futures interface, and found that, as he said, a long-term forward contract of up to 1.5 billion euros directly raised the exchange rate from 1.2110 to 1.2140.

  The market is divided on the future trend of the euro!

   "Someone took our sell order!"

Soon, another bad news came again. Santander Bank from Spain decisively took up the 2 billion euro spot of Tianyu Fund at a price of 1.2360. This news made the traders of Tianyu Fund stunned.

  The news spread to the foreign exchange market, which also made both parties in the transaction feel at a loss for a while.

  Although Santander Bank is a large commercial bank, it is difficult to achieve a single transaction of more than 2 billion euros with the authority of the trader alone, which must have revealed the meaning of the upper echelons. That is to say, Santander believes that the current exchange rate of the euro against the US dollar is on the low side, and they buy at a lower price, and buying at a higher price in the future will inevitably make a profit.

   But why do they think the future will rise?

  Twice in a row, the spot price of Tianyu Fund fell by more than half. Seeing that the momentum came from Europe, it still has the ability to continue to eat, and decisively stopped the next transaction. Zhong Shi fell into deep thought.

   "What the **** is going to happen?"

  Jiang Shan also came over and said to himself. He also saw something strange on the disk, first scanned the news surface, and after confirming that there was nothing unusual, he went to Zhongshi.

   "I don't know, but there must be something weird!"

  Zhong Shi shook his head frequently, "I feel something is wrong, but I don't know where the problem is. This feeling makes me very uncomfortable."

   After thinking and thinking, Zhong Shi still had no idea in the end, but what is strange is that the exchange rate of the euro to the dollar still shows no sign of reversal, and is still slowly falling, but the trading volume has suddenly shrunk a lot.

  Contrary to the spot market, the exchange rate price of the euro against the dollar in the forward market began to rise slowly, although the range was not too large, but it was very solid. The price of short-selling options is also slowly decreasing, showing the same trend as futures.

  This is a manifestation of market differences still existing, and even expanding.

"do not care!"

After thinking hard for a long time, Zhong Shi still couldn't find a reasonable reason, so he simply gave up useless considerations and made up his mind, "Switch the battlefield to the US market, and at the same time, together with Paulson, Delio and others, I need to convene an emergency s meeting."

   Soon, all these people were online. Due to the time difference, the peak of the transaction was slowly shifting from London to New York. It was the time when they started working, so it was easy for Jiangshan to find them.

   "Everyone, have you noticed any abnormalities in the euro exchange rate?"

  Zhong Shi first asked, "The market is very weird, I wonder if you noticed it?"

"Yes!"

  Paulson was the first to answer, "There is a divergence between the forward market and the immediate market, and there is a trend of gradual expansion. This is a bit wrong!"

  The other people did not answer, but there was a crackling sound. They didn't pay attention to the current dynamics of the euro, so they hurriedly checked the market after Zhongshi's speech.

  Five minutes later, all the voices stopped, and everyone was silent for a while. Naturally, they had no doubts about the opinions of Zhong Shi and Paulson.

   "I have checked all the news, and there is no abnormality!"

Zhong Shi continued, "In addition, to tell you the truth, I was the one who manipulated the sharp drop in the euro in the Asian market. The two sell-offs of up to 3 billion euros in the London market just now were also done by Tianyu Fund. Originally I wanted to replicate the success of the Asian market in the European market, but unfortunately the European consortium took over decisively."

   "You must know that my counterparty in Asia is the central bank!"

Zhong Shi finally said, "My biggest transaction in the Asian market was sold to the Central Bank of Thailand. But they soon realized that it was wrong, and I was lucky enough to make a fortune from them. But in Europe, Without waiting for the central bank to make a move, my spot, which is far more than the Asian market, has been eaten up."

   "So who is your counterparty?"

   Delio, who has been silent all this time, asked, "This is very important!"

   "Royal Bank of Scotland and Santander."

Zhong Shi replied without hesitation, "One is from Scotland and the other is from Spain. They should have nothing to do with each other. I also checked their previous transaction records. The average lot size is only about 50 million euros. The amount of 100 million euros really surprised me."

   "..."

  Dairio was also lost in thought.

"what do you mean?"

  Paulson asked again, "Mr. Zhong, what are you going to do now that you have summoned us?"

  Naturally, in this case, Zhong Shi would definitely not summon them for no reason, so when Paulson asked this sentence, other people's eyes lit up.

  Yes, the reason can be investigated later. Now Zhongshi must have a plan, which needs to be completed by everyone.

   "I think so!"

   After pondering for a moment, Zhong Shi said slowly, "I want to gather everyone's strength and make a short-term attack today to see who is supporting the market and what do they represent?"

"what do you mean?"

  Paulson's reaction was quick, he was taken aback immediately, and asked in surprise, "You mean, someone is against us?"

  Although none of the others spoke, the obviously bold gasps said everything.

   "It should not be aimed at us, but the entire market!"

Zhong Shi thought for a while and denied Paulson's statement, "According to the current situation, they should be targeting the side that sells euros. What I mean is that we gather a group of funds to exchange euros for dollars in a short period of time." The exchange rate has hit a low level, and the identities of the big buyers in the market will be exposed first, and then we will see what their plans are. Gentlemen, what do you think?"

   "How much capital are you going to raise?"

   Regarding Zhong Shi’s approach, everyone was noncommittal, but on the issue of the amount of funds, everyone had to bargain. Among them, Ackerman, who had the least wealth, was the first to ask.

   "10 billion euros in stock!"

  Zhong Shi said decisively, "Tianyu Fund will provide 3 billion euros, you can divide the other 7 billion euros, and sell them at the market price today to do a short-term test."

   "I have 2 billion euros here!"

  Paulsen said without hesitation, "In this way, there are only 5 billion euros left. If you only do short-term, you should easily make up so much money."

  He was afraid of being rejected by others, so he said such words as soon as he opened his mouth.

  Naturally, before shorting Europe, these funds borrowed a large amount of euros, and now it is impossible to say that there is no spot.

   Thanks to book friends for their eternal tears and everbondjack for voting monthly! Thanks to book friends zylwa, Shang, Qiu, and Yanxiaoqianqian for their rewards! I am sorry that I have conceived for a long time today and the update is late, and tomorrow will be earlier. I hope more and more book friends can support this book, thank you everyone!

  (end of this chapter)