The big market themes last week were trading increased China risk and a resilient US economy with higher US ‘real’ yields (TradingView - TVC:US10Y-FRED:T10YIE ) – the result was broad USD strength and global equity weakness. GBP longs also saw tailwinds from the UK data flow, with GBPNOK the best performing major currency pair on the week – Services PMI could...
Westy and Blake are back and take you through all the market factors you need to have on your radar (volatility, yields, USD & inflation), look at some juicy charts USDJPY, Gold, GBPAUD & AUDCAD) and actionable trade ideas (L/S R2K & USDMXN).
When trading the AUD you’re essentially expressing a view on China. USDCNH has been on a one-way tear of late and has weighed on AUDUSD, reflecting poor China economics, concerns of a credit event, but also the comparative returns seen in US Treasuries (over China bonds). We’ve seen underperformance in Chinese equity and industrial metals. The AUDUSD daily...
US 10YR ‘real’ rates are essentially US 10yr Treasuries adjusted for 10yr inflation expectations – TradingView users can set this up using the equation: TVC:US10Y-FRED:T10YIE.
We can see this as the true cost of capital and in effect, the higher yields rise the more this supports the USD and negatively impacts US equity valuations. The rate of change (ROC) is...
We head into monthly options expiry (OPEX) on Friday and that may influence flows and price action in the US500, but for now, the equity bears are starting to get some traction. We saw the bulls try and take price above Monday’s high (4493) but they failed and the index closed not just below the range lows, but through the 50-day MA. Outright shorts remain...
The USD reigned supreme in G10 FX last week, and unless we see a far better feel towards China this week then I see the probability skewed for further USD gains.
USDCNH remains central to the positive USD bias, and despite the best efforts of the PBoC to push back on the yuan weakness the daily chart is a thing of beauty – perhaps the better way to think about...
Westy and Blake are back and take you through all the market factors you need to have on your radar (Equities, CPI &PPI, Energy & Trading), look at some juicy charts (EURAUD, USDCHF, XAUAUD & AUDJPY) and actionable trade ideas (Nat Gas & Silver).
Energy markets are front of mind – we see crude into new cycle highs and riding the 5-day EMA – clients are progressively increasing short exposures, although we’re not at historically high skews.
Nat Gas (NG) – the wild west of energy markets – has broken the $1.91 to $2.82 range it has held all year, and the Bollinger Band volatility squeeze is firmly on. EU...
As is typically the way in FX trading the breakout traders see a set-up on the higher timeframes and either the market uses these levels to fade the move, or the breakout fails to gain traction and ultimately reverses.
Those seasoned traders who use breakouts for trade entry – often momentum and trend-followers – know the percentage of breakouts that lead to...
The BoJ would be comfortable with the reaction towards the recent tweak to its YCC program – there has been limited gyrations in Japanese equity markets and bank equity is about to break to new highs. Predictably, we’ve seen the 10yr JGBs grind higher to 63bp, but the market is firmly of the view that the back-up in JGB yields will not promote a rush from pension...
After a solid tightening of financial conditions over the week we watch to see if the negative tone spills over into the new trading week. On the week, the NAS100 fell close to 3%, with Apple closing below its 50-day MA; a factor that had been acting as a solid trend filter since late January. Instead of buying dips, could we be looking at selling rallies now in...
Boom! 💥Westy and Blake take you through all the market events and macro factors you need to have on your radar Volatility, Bonds, USD & NFP), look at some juicy charts (USDJPY, GBPUSD, AUDUSD & AMZN) and actionable trade ideas (US500 & CADJPY).
Last week was some ride and I feel like I’ve aged 10 years, but what have we learnt?
The Fed and the ECB are almost done tightening and market pricing shows this front and centre. In the case of the US, core PCE and the Employment Cost Index (ECI) showed us that price pressures and wages are abating. However, the US Q2 GDP print grew at an above-trend pace (at...
What a week! Westy and Blake take you through all the market events and macro factors you need to have on your radar (risk, ECB & BOJ, FOMC & China), look at some juicy charts (EURAUD, EURJPY, Crude & MSFT) and actionable trade ideas (Nat Gas and EURUSD).
It’s the week that every risk manager has on the radar. It’s time to get in front of the screen as this week has it all.
We navigate corporate earnings from several global titans. We get several marquee economic data releases, central bank meetings from three of the world’s price makers, and we’re likely to hear of stimulus to be announced from China’s Politburo...
Westy and Blake are back for The Trade Off! Macro themes (USD, US Earnings, Big Week Ahead, FOMC), juicy charts (DXY, AAPL, AUD & Cotton) and trade ideas (AUS200 & GBPJPY). That's the Trade Off!
For the fourth consecutive day, we see the USD index holding below 100, although with consolidation now playing out, we see indecision to make a move abundantly clear in the price action – this will rectify itself, and traders should respect developments, but which way will it play out?
We see clients aggressively long USDs across the board, countering the USD...
It was a huge week for USD traders and the USD remains the central focus of clients and wider market participants this week. US data is lighter on the ground and with the Fed in its blackout period, we are in cruise control into next week’s FOMC meeting, where a 25bp hike is an almost done deal.
Will this hike prove to be the last in the cycle?
The market is...
