By Darrell Martin
As the seasons change across the world, laws require countries to change the time. Where it has been summer, there is a good chance countries have been on Daylight Saving Time or “Summer Time.” Where it is changing to summer, those countries are changing their clocks to Daylight Saving Time.
There are several countries that make the change and many that do not. Those that do make the change, do so on different days. With clocks moving forward and back across the world, it can affect trading for a bit. It can mess with average moves and the time markets move.
Countries and the currencies to watch for include the following:
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Australia (AUD) already changed October 1
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EUR, CHF, GBP will change October 28
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USD, CAD on November 5
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Japan (JPY) does not change
When you think about it, especially in the fall, that time is actually repeated. In the spring, that hour is lost. However, the time change usually occurs over a weekend giving traders and markets time to make the adjustment.
Besides the feeling of jet lag without enjoyment of a trip, some studies have shown that because of the change in sleep patterns, decision-making processes are affected. Because of this, one study argued that Daylight Saving Time changes lowered stock market returns. It was also noted, “Evidence suggests that the positive relationship between return and volatility becomes negative on the Mondays following DST changes.” See NCBI PubMed. Further study shows there was an unfounded rebuttal.
People across the globe will continue to debate the pros and cons of time change. As traders, it is important to be aware of the approaching changes and take the necessary steps to insure accurate trades can be placed.
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