Today the 18th September 2014 is a historic date for British history, and unless you have zero interest in British politics or you have been living under a rock for the past few weeks, you will all know what I'm talking about. Yes I'm talking about the Scottish Independence Referendum vote - this historic vote is for the Scottish people to decide whether to stay in the United Kingdom or go it alone.
Political figures from #Westminster was quick to visit #Scotland to try and persuade the Scottish to vote No for Scotland leaving the United Kingdom, promising to give more powers to the Scottish government on how they decide to run their country.
I just want to point out this articles objective is not to express my opinions about the matter - as both sides have fair and valid points. For the No side (the side wanting to stay within the UK), the phrase - 'Together we are stronger' is what will come to the mind of some people, and they will not be wrong for believing that. Scotland and England both have resources and industries both parties benefit from, a break up of the Union could possibly weaken both economies in the long run (I will discuss this later). Also if Scotland successfully leaves the United Kingdom, who will be next? Will Wales, and Northern Ireland decide to go it alone, or maybe cities such as London or Manchester may want to become independent ... who knows? However, on the argument for the Yes side - the want and need for a country to be governed by the citizens of that country and not by a "foreign" government, is a right that shouldn't be denied to any state.
But how is all this important to us traders? The outcome of this vote could have a major effect on the markets (especially the GBP and the #FTSE), a successful Yes vote could see the GBP tumble even further against the USD (and other currencies) than it already has over the past couple of months and the FTSE could possibly take a serious hit, over fears that the UK is no longer as safe as it used to be for Investors. It might mean Mark Carney will have to reevaluate his recovery plan for the UK. If this Scenario was to unfold, as traders we should be looking to take advantage of the situation, it may be a good idea to short the FTSE and GBP against stronger performing currencies.
A word of caution - even if there is a yes vote this Scenario may not play out the way I described and there is likely to be high volatility within the markets during this voting period, which means there will be be big choppy move which may catch out many traders, make sure you do your research as always and have a plan if you decide to trade this even. The final results of the vote should be known on the 19th September, which is an important date also for Alibaba.
Finally the Chinese e-commerce group will have it's long awaited #IPO, and if you believe the hype, it may possibly be the largest floatation in history. So how do you invest in the Alibaba IPO? Well foreigners to China are excluded from getting hold of Alibaba's IPO shares, as Chinese law doesn't allow foreigner investors to own shares in Chinese companies. So traders could invest in #Yahoo and #SoftBank which owns 23% and 35% of Alibaba respectively and who's share prices will certainly benefit from a good IPO from Alibaba Group.
Good Luck Trading.
Follow @PiDeJonge
Labels: Alibaba, Bank of England, BoE, Dollar, FX, GBP, GBP/USD, Mark Douglas, news trading, Pound, Scotland, Softbank, Stock, Yahoo