A highly unusual astronomical phenomenon has thrown global currency markets into upheaval, with the sun disappearing over a wide swath of North America during the last few minutes. As the unexplained blackout takes effect, traders are struggling to perform simple mathematical operations (such as calculating cross rates and interpolating broken-dated forward differentials) without the assistance of solar-powered calculators. Due to the rising cost and complexity of computation, exchange rates are being quoted to the first decimal place, and liquidity in foreign exchange options has disappeared completely.
Superstitious investors are convinced that the end is nigh, referencing research done by the mathematician Steve Puetz – which found that at least eight of history’s biggest stock market crashes occurred within the six day period around a full moon that occurred within six weeks of a solar eclipse (including the Dutch Tulip Mania of 1637).
Spooked investors are selling out of Bitcoin, leaving the cryptocurrency up less than $13,500 USD for the day – its worst performance this year.
On the flip side, recently-blinded investors are performing technical analysis much more effectively.
Bottom Line: Until the thief who stole the sun gives it back, risk-sensitive assets are likely to come under selling pressure. We would suggest that corporate hedgers should approach this market environment cautiously (while making appropriate sacrifices to the sun god).
*Don’t take any of the foregoing too seriously. We wrote it in the dark.
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