Arguably one of the biggest themes through Q323 was the one-way trend in the USD. During the quarter we saw trade-weighted USD gain 3.1%, with the USD essentially outperforming against all G10 currencies, except the NOK, which caught strong tailwinds from a surging crude price.
We consider the recent drivers, but we explore the scenarios that could see further...
After 11 straight weeks of gains in the USD (DXY index), driven by EURUSD trading into 1.0488, and a key weekly close above the YTD range highs (105.40), we ask whether the dollar can make it a 12th.
News that Congress had miraculously pushed out the govt. shutdown for 45 days should be welcomed by risky assets and there is modest gapping risk for the open....
Blake and Michael are back for TTOO vol. 2 while Westy is still herding cattle in the Outback. Volatility is back in as always, they're talking macro, charts and trade ideas to help you make the most of the fresh movement in markets!
It's finally happening! For the first time ever, we have a collab between the OG Aussie Trade Off (represented by Blake while Westy is away...again...and Michael from TTO UK. It's a good one - as always, they're talking macro, charts and trade ideas.
Westy and Blake are back and talk about all market factors you need to have on your radar! Macro FOMC, ECB, Energy & Inflation), juicy FX charts (CADJPY, AUDJPY, EURCNH & AUDUSD) and actionable trade ideas (L/S XLE/XRT ETFs & EURCHF). See you there!
It’s a central bank bonanza this week, where a good number of these meetings are ‘live’, and where we should see further tightening. The Fed meeting is not a live one (they won't raise rates), but it will get central focus, as it always does.
While swaps markets for a number of counties price a hike this week, and a risk of another in November, residual slowing...
While NOK (Norwegian krone) has the strongest statistical relationship with Brent and WTI crude, we can see a strengthening correlation between crude and the CAD. We see the 1-month correlation between crude and CADJPY at 0.68, so it's meaningful. We also see (on the daily) price breaking out of the top of its recent range of 108.50. While many will be concerned...
Further highs in crude have been seen in this momentum move. This time courtesy of some punchy OPEC forecasts for a 3.3m barrel p/d deficit in Q4. The IEA (International Energy Agency) are due to provide their update in the session ahead, and one can also expect a change in the forecast, given they previously pencilled in a 230k bpd deficit. $90 is the obvious...
It was all very exciting on the floors in Asia yesterday, with traders reacting to a hawkish interview by BoJ Governor Ueda. Essentially, Gov Ueda laid out a conditional path and timeframe for the first-rate hike and a move away from its Negative Interest Rate Policy (NIRP), should the data permit.
One can assume that the BoJ are also one step closer to moving...
Trading Overview
We head into the new trading week with the USD index (DXY) closing higher for the 8th straight week, a fate we haven’t seen in some 18 years – it's little surprise that retail traders are countering that move, accruing a solid net short position. EURUSD has closed lower by the same duration, and that makes a fitting backdrop for the two...
Westy and Blake are back and talk about all market factors you need to have on your radar! Macro (USD, ECB, FOMC & Crude Oil), juicy charts (GBPUSD, EURMXN, Apple (AAPL) & Russell 2000) and actionable trade ideas (KRE ETF & EURUSD). See you there!
To understand the fundamentals at hand we can revert to the USD smile concept. Essentially, this portrays a model where the USD outperforms in times of ‘risk off’ (equity drawdown/higher volatility), and/or when global economic data slows, and the US economy looks 'exceptional'.
In the past 24 hours, one could argue that both the left and right sides of the...
We saw a lot of confusion in the headlines as to the weakness in AUDUSD yesterday. The RBA meeting had very little to do with it, and the AUD has just been a proxy of Chinese markets. A higher USDCNH and weaker HK50 saw AUD lower, and a simple overlap will highlight this. Weaker China Caixin services PMI data was behind this, so as we look ahead at China trade...
We come into the new trading week with several major equity indices losing steam, and with the VIX index closing at new cycle lows. Short exposures seem hard graft with volatility so low, but we have some defined levels to set risk to for those positioning for drawdown – EUSTX50 – 4350, GER40 -16,000, US500 – 4540 and NAS100 – 15,628 – an upside break though in...
Westy and Blakecover all market factors you need to have on your radar! Macro (Sentiment, PCE & NFP, China & looking ahead), juicy charts (Gold, AUDJPY, GBPUSD & AUDUSD) and actionable trade ideas (EURCAD & USDCHF). See you there!
The current flow suggests this is the risk. On the daily chart, we see price closing above the 61.8 fibo of the July/Aug sell-off, as well as the 24 Aug highs. We see price holding above the 3-day EMA, with this ultra-ST moving average pulling above the 8-day EMA. Momentum accounts would be increasing net long positions on this move. On a micro level, Nvidia is...
Last week we saw GBPUSD print a bearish outside week reversal, although the buyers staged a solid defence of the 100-week MA (now 1.2534). Those positioned short will want to see price close below this moving average to increase the prospect of further downside.
Given the weekly reversal, any potential downside break of last week’s low of 1.2548 is also worth...
We move past Jackson Hole with a slight hawkish lean from chair Jay Powell, and this adds increased empathises on US core PCE inflation and US nonfarm payrolls as the big macro event risks. It remains unlikely we get a hike from the Fed in September, but November is shaping up to be a ‘live’ event, where both data points have the potential to throw interest rate...
