Magazine article Modern Trader

Globe Trotting

Magazine article Modern Trader

Globe Trotting

Article excerpt

Recently, during an internal magazine planning meeting, someone brought up the idea of a separate section of "international market stories." I nixed it right away, noting that long ago we did have a special feature focused on "international" stories, but that boat has sailed. As someone else pointed out, correctly, the entire industry is global, thus what happens here affects Europe and Asia, and typically the reverse is true.

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Like jury duty, the markets are the world's greatest equalizer. And as technology makes boundaries passe, regulation becomes trickier and business partnerships more prevalent. The futures markets have always been global: commodities come from all countries in the world, and chances are, something grown, mined or traded in that country is a contract on a global exchange. From rice to sugar to oil to stock indexes, commodities live in a macro world.

Exchanges typically have been on the cutting edge developing contracts that attract a global crowd. Some exchanges thrived on non-indigenous contracts: the London International Financial Futures and Options Exchange cut its teeth on the German Bund, the Singapore Exchange's biggest contract was the Eurodollar, through the mutual offset system with the Chicago Mercantile Exchange, and more recently Japan's Nikkei 225 stock index. Today, even commodities have developed more international heft: the soybean market in Brazil is as key to the global price and seasonality now as is the U.S. soybean market; China is not only the world's largest importer of cotton, but also the world's largest exporter.

Having covered the international markets for years, I can say without hesitation that most traders I know, especially those outside the United States, have always thought in international terms. It was rare to find one who didn't. The U. …

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