It's that time of the month again with Friday the last trading day of the month and corporate month-end coming up on Wednesday.
Month-end flows: Usually a time when big investors, like pension funds and mutual funds, might adjust or rebalance their portfolios at the end of each month.
Corporate month-end flows: financial activities from corporates which can include things like hedging, converting foreign profits back into their home currency, paying dividends, or settling bills in other jurisdictions.
These flows can be varied and can be difficult to plan for and predict, with price action often doing the opposite of what many month-end quant models might suggest.
For the most part, I find it good enough to be aware of these potential flows and try to stay clear of them as much as possible, especially around the 4PM London fix.
That also means if we see massive one-sided buying or selling of a major currency without any fresh fundamental catalyst it could be a sign of month-end flows.
