It stands to reason that the futures market has developed to this day, and the daily clearing system should be the consensus of all traders, because futures trading is margin trading, if the daily liquidation is not carried out, the price rise and fall will accumulate the risk of the losing party, and when this risk accumulates to a certain extent, those who do the wrong direction of the transaction party will face the catastrophe, and even eventually default.

However, the LME does not adopt this system, and the LME's management of members is actually limited to clearing members, and basically leaves non-clearing members and customers alone, while it has only 14 clearing members, and only these few are trading on the floor obviously not to meet the needs of the market. In this case, the trading model between the offices of brokerage companies is very popular, and this type of trading by telephone accounts for more than 60% of the total trading volume of the entire copper market.

Strictly speaking, the LME is not an exchange in the strict sense of the word, it is a hybrid exchange with forward trading as well as centralized trading. Since the transactions between the offices of brokerage companies are over-the-counter transactions, there are basically no regulatory problems, so the situation of manipulation here is repeatedly prohibited.

"Tell me about your deals?" Zhong Shi said nonchalantly as he fiddled with the pen in his hand. He had the impression that Mr. Hammer had now begun to lay out in the copper market. For the Sumitomo Consortium, they have a natural advantage in manipulating copper, because Sumitomo Corporation, which is part of the Sumitomo Consortium, is the world's largest copper exporter, and it is in their interest to raise the price of copper exports.

"We ...... here" Brian briefly introduced the situation of the brokerage company, which is ordinary margin, trading volume and other ordinary situations. At the end, he said proudly: "Our trading volume is the largest in the market, and you can also make counterparties with our brokerage company, which is a gambling agreement." ”

Even if it's an OTC agreement, the brokerage company has to follow certain rules of the exchange, after all, they rely on this platform, but privately they can raise the leverage through financing, so the maximum trading volume mentioned by Brian is very likely.

Zhong Shi laughed and said, "So, I want to buy all the long orders in the market, is that okay?" ”

Unconvinced, Brian asked, "Do you know how many orders there are in the market?" Let's not talk about the floor and electronic disks, let's talk about the telephone market. The daily trading volume reached 400,000 lots. Do you know how much money is required for this? "The margin alone requires more than two billion dollars, and even Mr. Hammer doesn't have that much courage.

More than two billion dollars is barely able to come up with gritted teeth for the current Zhongshi, but if this is the case. Even the LME, which has always ignored market manipulation, cannot tolerate it.

Besides, once you encounter a forced position. As a copper trader, the short position has a spot copper trade. Zhongshi may have the ability to deliver, but why buy such copper?

"Hehe" Zhong Shi laughed noncommittally twice, and then changed the topic. After two more gossips, Brian bought a long order of 100 lots of copper at the market price, and the delivery date was July 31.

The reason why he did not enter the warehouse in a big way is because Zhong Shi still needs to look at the trend of the copper market, after all, whether the trend will be like that of later generations, Zhong Shi is really not sure in his heart.

……

Returning to the U.S. bond market, the game between the two sides in the financial markets has become increasingly white as the U.S. initiates trade sanctions against Japan.

After an unprecedented rise in bond market yields on March 2, the entire bond market is showing signs of collapse, on which day Japanese long-term bonds rose by 17 basis points, which means that the price of bonds in 100 terms fell by a full 1, which is a change of $1,000 for each bond with an underlying amount of $100,000, and holding a position with an underlying amount of $1 billion means a loss of more than $10 million in a day.

With the price reduction comes the liquidity of the entire bond market, which is the worst thing.

At this stage, hedge funds are starting to get scared because they can't sell their bond portfolios, and they urgently need to sell their bond portfolios to meet the margin requirements in the face of brokers' constant margin calls, so the liquidity in the market disappears.

Unbeknownst to Zhongshi, on Wall Street, macro hedge funds are struggling to find rivals in the market, seeking to sell their bond portfolios.

"Sell it, sell it all to me!" In hedge funds' internal trading platforms, such rants are everywhere.

They were greeted with louder roars, and the traders shouted back even more angrily: "I can't sell it!" ”

……

"Mr. Zhong, I think we can buy long-term U.S. bonds!" By the end of March, the market was in a wail, and Luis, who had been following the European and American bond markets, finally couldn't bear it anymore and called from Hong Kong.

On March 22, the Fed announced another rate hike, another 25 basis points, and the short-term interest rate rose from 3.25 to 3.5.

The rise in yields in the bond market is no longer explained, not by the Fed chairman, not by the president, not even by the hedge fund managers who are fighting on the front lines.

The yield on the 30-year bond rose to 6.5%, and the yield on the 10-year bond also rose to 5.5%, and in just two months, the yield on the two most traded bonds in the market rose by 18 basis points and 25 basis points, respectively, which means that Zhongshi has made a lot of floating profits in both bond markets.

"Do you think inflation in the U.S. has been subdued?" Zhong Shi asked rhetorically.

"Yes!"

"Have you noticed? The Japanese government is still clinging to U.S. Treasury bonds, and at the same time, due to the rise in the exchange rate in February, a lot of yen capital turned into dollar capital into the U.S. market, and the reaction of this money into the market is likely to appear in the economic data in April? ”

"But what is Japan's capital?"

"Don't underestimate the energy of Japanese money, maybe they can force the Fed to raise interest rates further. You must know that the interest rate in the United States is higher than the interest rate in Japan, in addition to the Japanese market, due to the rise in the yield of the European bond market, many European dollars have flowed back to the United States, you must know that this money is extremely risk-averse. ”

"What do you mean......"

"Yes, the Fed will continue to raise interest rates in the future. Now the collapse of the bond market is far from over! Zhong Shi patiently explained.

"But ......," Louis said after a long time of hesitation, and finally gritted his teeth: "Recently, a rival wanted to sell us a batch of long-term dollar bonds, and the price was very attractive, and the yield reached 5.6%, which is 10 basis points higher than the yield in the market. I think ......"

"Oh? And such a thing? Zhong Shi was stunned for a moment, and then reacted that due to the poor liquidity of bonds in Europe, the United States, Canada and other places, some hedge funds have targeted their counterparties to financial centers such as Tokyo and Hong Kong. He thought about it for a while, and finally said: "Forget it, I estimate that the yield on bonds will rise in the future, and the price they give will be even lower when the time comes." ”

"Alright then!" Louis's voice revealed unwillingness, but he had no choice, who called Zhong Shi the fund manager who was in charge of the overall situation, although he was very dissatisfied with Zhong Shi's judgment.

However, the market's reaction still confirmed Zhongshi's judgment.

Shortly after the Fed announced another rate hike, Japan again announced that it would reduce its holdings of U.S. Treasury bonds, this time at $8 billion, and the money would not be shipped back to Japan's capital, but would be stored in the U.S. storage system.

On 18 April, the Fed announced another rate hike, raising short-term interest rates from 3.5% to 3.75%. At the same time, Japan's Hosokawa cabinet announced its resignation.

Although the Hosokawa cabinet hardened itself in the US-Japan talks, due to Japan's sluggish economy and the chaotic political situation, he was forced to announce his resignation after less than a year as prime minister.

The Japanese consortium, which has reaped huge profits from the U.S. bond futures market, has stepped up their shorting efforts, which is also thanks to the system of the U.S. exchange, because the huge amount of U.S. Treasury bonds held by Japan enjoys hedging exemptions, so the number of positions held is several times larger than that of speculative accounts, and the profits obtained are also several times that of Zhongshi's current profits.

On 17 May, less than a month after its last rate hike, the Fed announced another rate hike, this time by a full 50 basis points, bringing short-term interest rates from 3.75% to 4.25%.

Although the U.S. knows that inflation is fueled by Japan, there is a good reason for them to reduce their holdings of U.S. Treasury bonds when long-term Treasury yields rise, which also makes the U.S. side bitter.

On 15 August, the Fed raised rates again, another 50bp hike, raising short-term rates from 4.25% to 4.75%. At the same time, the United States and Japan once again began negotiations on a trade surplus.

On 15 November, the Fed peaked its rate hikes, this time by a full 75 basis points, jumping short-term rates from 4.75% to 5.50%, while the 10-year long-term rate jumped to 7.5%.

The tragic interest rate hike has seriously affected the development of the US economy, and in terms of foreign exchange, the exchange rate of the Japanese side has basically not risen to the point of 100:1 again this year, so that the Japanese side has also suffered heavy losses in exports.

By the end of 94, the two sides had fallen into an inseparable situation, and the relationship between the two had fallen to the lowest point in history, which in the eyes of the high-level leaders of both sides, was undoubtedly a state of killing a thousand enemies and losing 800 of themselves, but neither side had any intention of stopping, but such a stalemate was broken by an incident that happened at the end of 94. (To be continued......)

PS: Hastily ended the 94-year debt crisis, and quickly drove out the New Year's ones, tired to death.