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RBA MONETARY POLICY DECISION HIGHLIGHTS - GBPAUD AUSSIEAs expected the RBA deciced to keep the OCR unchanged at 150bps. 30D Aussie bank bills implied only a 2% chance of a cut, down from the 10% we saw several weeks ago. There were few hints as to further policy, and it certainly feels as if the calls/ rhetoric for further cuts has been dampened in recent meetings following the august reduction. As well as in recent weeks, sentiment from the insto/ macro community has also shifted towards 2017 cuts vs 2016 which was previously a consensus view. I remain bearish on aussie crosses, as I expect another leg lower towards 1.00 for audnzd which should maintain aussie supply across currencies as I expect kiwi to be picked up a the headline G10 yield ccy. The fundamentals (inflation, growth, employment, housing) of aussie and kiwi remain very similar, but the rate differential is 25-50bps in NZDs favour thus imo its difficult to justify audnzd being worth less than parity. up here at 1.05 thus the leg lower towards 1.00 (my 1-2yr average) would realise firm cross market aussie supply. Short aussie positioning should be taken once AUDNZD has confirmed the leg lower (e.g. this topside correction fades with some daily closes lower/ downside structure forms in lower lows/ lower highs on meaningful timeframe(s). My preferred cross is GBPAUD longs as i have discussed before I feel STG is heavily undervalued in the medium term - though this renewed brexit selling needs to be watched in the immediate term (which works nicely to give time for AUDNZD to restart on the offer). GBPAUD has structure right until 1.40 2013 lows so there is plenty of room for further GBP selling until this trade moves into uncharted territories (unlike GBPNZD which has just cracked all time lows). USD longs are on the risky side going into election & with the finger less fed. RBA MonPol Decision: RBA SAYS GLOBAL ECONOMY GROWING AT LOWER THAN AVERAGE PACE - Judged Steady Rate Consistent With Growth, Inflation Targets - Pace Of China Growth Appears To Be Moderating - Rising A$ Could Complicate Economic Adjustment - Inflation Expected To Remain Low For Some Time - Australian Economy Growing At Moderate Rate - Labour Market Data Mixed, Sees Continued Growth In Employment - Inflation Expected To Remain Low For Some Time - Lenders Taking More Cautious Attitude To Housing - Large Decline In Mining Investment Being Offset By Growth In Other Areas - Says Household Consumption Growing At Reasonable Pace But Appears To Have Slowed Recently RBA SAYS INFLATION EXPECTED TO REMAIN LOW FOR SOME TIME RBA SAYS PACE OF CHINA GROWTH APPEARS TO BE MODERATING RBA SAYS JUDGED STEADY RATE CONSISTENT WITH GROWTH, INFLATION TARGETS RBA SAYS GLOBAL ECONOMY GROWING AT LOWER THAN AVERAGE PACE RBA SAYS HOUSEHOLD CONSUMPTION GROWING AT REASONABLE PACE BUT APPEARS TO HAVE SLOWED RECENTLY RBA SAYS LARGE DECLINE IN MINING INVESTMENT BEING OFFSET BY GROWTH IN OTHER AREAS RBA SAYS LENDERS TAKING MORE CAUTIOUS ATTITUDE TO HOUSINGRBA SAYS LABOUR MARKET DATA MIXED, SEES CONTINUED GROWTH IN EMPLOYMENT RBA SAYS AUSTRALIAN ECONOMY GROWING AT MODERATE RATE RBA SAYS INFLATION EXPECTED TO REMAIN LOW FOR SOME TIME RBA SAYS RISING A$ COULD COMPLICATE ECONOMIC ADJUSTMENT
Long
by QuantumLogicTrading
LONG EURAUD - STRAT TRADE: 99.13% PROBABILITY OF REVERSALLong EURAUD: 1. Based on the last 16yrs of daily close data (since 01/01/2000 to date) EURAUD has a cumulative probability of a =>6th day lower at 0.87%, hence there is a implied 99.13% chance of reversal on the daily. Trading Strategy: 1. Buy EURAUD at market in 1xlot, and add 2x on each daily close lower from here. Start in VERY small lots to reduce risk and ensure you can add on adverse moves lower. TP is the next daily close higher. Any questions please ask - also see performance attached of recent trades using the same stats
Long
by QuantumLogicTrading
2
SHORT AUDNZD - STRAT TRADE: 99.5% PROBABILITY OF REVERSALSHORT AUDNZD: 1. Based on the last 16yrs of daily close data (since 01/01/2000 to date) AUDNZD has a cumulative probability of a =>7th day lower at 0.5%, hence there is a implied 99.5% chance of reversal on the daily. 2. Technically there is also some nice structure about the 1.045 level. Trading Strategy: 1. Sell AUDNZD at market in 1xlot, and add 2x on each daily close lower from here. Start in VERY small lots to reduce risk and ensure you can add on adverse moves lower (it could be several days). TP is the next/ First daily close higher. Any questions please ask - also see performance attached of recent trades using the same stats
Short
by QuantumLogicTrading
8
LONG EURAUD - STRAT TRADE: 99.13% PROBABILITY OF REVERSALLong EURAUD: 1. Based on the last 16yrs of daily close data (since 01/01/2000 to date) EURAUD has a cumulative probability of a =>6th day lower at 0.87%, hence there is a implied 99.13% chance of reversal on the daily. Trading Strategy: 1. Buy EURAUD at market in 1xlot, and add 2x on each daily close lower from here. Start in VERY small lots to reduce risk and ensure you can add on adverse moves lower. TP is the next daily close higher. Any questions please ask - also see performance attached of recent trades using the same stats
Long
by QuantumLogicTrading
SHORT AUDNZD - STRAT TRADE: 99.5% PROBABILITY OF REVERSALSHORT AUDNZD: 1. Based on the last 16yrs of daily close data (since 01/01/2000 to date) AUDNZD has a cumulative probability of a =>7th day lower at 0.5%, hence there is a implied 99.5% chance of reversal on the daily. 2. Technically there is also some nice structure about the 1.045 level. Trading Strategy: 1. Sell AUDNZD at market in 1xlot, and add 2x on each daily close lower from here. Start in VERY small lots to reduce risk and ensure you can add on adverse moves lower (it could be several days). TP is the next/ First daily close higher. Any questions please ask - also see performance attached of recent trades using the same stats
Short
by QuantumLogicTrading
RBA ASSIST GOV LOWE SPEECH HIGHLIGHTS - AUDUSD AUDJPY EURAUD* Gov Lowe speech Highlights: -RBA GOV LOWE SAYS INFLATION IS EXPECTED TO REMAIN LOW FOR SOME TIME, BUT THEN TO GRADUALLY PICK UP AS LABOUR MARKET CONDITIONS STRENGTHEN -RBA GOV LOWE SAYS OUR VIEW IS THAT A FLEXIBLE MEDIUM-TERM INFLATION TARGET REMAINS THE RIGHT MONETARY POLICY FRAMEWORK FOR -RBA GOV LOWE SAYS  A FLEXIBLE MEDIUM-TERM TARGET IS THE BEST WAY FOR US TO DELIVER LOW AND STABLE INFLATION IN A WAY THAT CONTRIBUTES TO OUR OTHER BROAD RESPONSIBILITIES -RBA GOV LOWE SAYS  WE EXPECT THE ECONOMY TO CONTINUE TO BE SUPPORTED BY LOW INTEREST RATES AND THE DEPRECIATION OF THE EXCHANGE RATE SINCE EARLY 2013 -RBA GOV LOWE SAYS HOUSING SITUATION IS SOMEWHAT MORE COMFORTABLE THAN IT WAS A YEAR AGO, ALTHOUGH WE CONTINUE TO WATCH THINGS CAREFULLY -RBA GOV LOWE SAYS OUR JUDGEMENT IS THAT PAST EASING IN MONETARY POLICY IS SUPPORTING JOBS AND ECONOMIC ACTIVITY -RBA GOV LOWE SAYS BOARD VERY CONSCIOUS THAT RATE CUTS MEAN LOWER INTEREST INCOME FOR SAVERS  -RBA GOV LOWE SAYS THE ECONOMY IS ADJUSTING REASONABLY WELL TO THE UNWINDING OF THE BIGGEST MINING INVESTMENT BOOM IN MORE THAN A CENTURY -RBA GOV LOWE SAYS RECENT GDP DATA A LITTLE ABOVE MOST ESTIMATES OF TREND GROWTH IN OUR ECONOMY.  -RBA GOV LOWE SAYS  STORY ON INCOME GROWTH HAS BEEN LESS POSITIVE, WITH GROWTH IN NOMINAL GDP BEING DISAPPOINTING -RBA GOV LOWE SAYS IMPORTANTLY, THE DRAG FROM THE FALL IN MINING INVESTMENT WILL COME TO AN END -RBA GOV LOWE SAYS LOW WAGE GROWTH AND LOWER COMMODITY PRICES HAVE MEANT THAT CPI INFLATION HAS BEEN QUITE LOW OVER RECENT TIMES -RBA GOV LOWE SAYS  IF THESE INCREASES WERE TO BE SUSTAINED THEN WE COULD LOOK FORWARD TO THE DRAG ON NATIONAL INCOME FROM FALLING COMMODITY PRICES COMING TO AN END -RBA GOV LOWE SAYS RECENT NEWS ON COMMODITY PRICES HAS BEEN A BIT MORE POSITIVE THAN IT HAS BEEN FOR A WHILE -RBA GOV LOWE SAYS HOUSEHOLD CONSUMPTION GROWTH HAS BEEN OK, NOT FAR FROM TREND -RBA GOV LOWE SAYS A LOWER AUD WOULD BE HELPFUL -RBA GOV LOWE SAYS , BUT OF COURSE MOST CENTRAL BANKS WOULD LIKE LOWER CURRENCIES -RBA GOV LOWE SAYS UNDERSTANDABLE WHY AUD HAS RISEN OVER RECENT MONTHS, BUT GOOD IF A BIT LOWER -RBA GOV LOWE SAYS LABOUR MARKET STORY POSITIVE OVERALL, CAN LOOK FORWARD TO REASONABLE JOBS GROWTH -RBA GOV LOWE SAYS LABOUR MARKET NOT AS STRONG AS HEADLINE UNEMPLOYMENT RATE SUGGESTS -RBA GOV LOWE SAYS VERY UNLIKELY RBA WILL RUN OUT OF POLICY ROOM -RBA GOV LOWE SAYS GOVERNMENT COULD USE BALANCE SHEET TO BORROW TO FUND INFRASTRUCTURE INVESTMENT -RBA GOV LOWE SAYS WOULD BE WATCHING MARKET REACTION SHOULD TRUMP BE ELECTED -RBA GOV LOWE SAYS DO NOT HAVE A PARTICULAR CONTINGENCY PLAN FOR MARKETS SHOULD DONALD TRUMP BE ELECTED US PRESIDENT -RBA GOV LOWE SAYS FURTHER CUT IN RATES IS POSSIBLE, DEPENDS ON WHOLE RANGE OF FACTORS -RBA GOV LOWE SAYS POCKETS OF SPARE CAPACITY IN CHINESE ECONOMY, BUT DO NOT WANT TO OVERSTATE THE PROBLEMS
by QuantumLogicTrading
2
RBA ASSIST GOV LOWE SPEECH HIGHLIGHTS - AUDUSD AUDJPY EURAUD Gov Lowe speech Highlights: -RBA GOV LOWE SAYS INFLATION IS EXPECTED TO REMAIN LOW FOR SOME TIME, BUT THEN TO GRADUALLY PICK UP AS LABOUR MARKET CONDITIONS STRENGTHEN -RBA GOV LOWE SAYS OUR VIEW IS THAT A FLEXIBLE MEDIUM-TERM INFLATION TARGET REMAINS THE RIGHT MONETARY POLICY FRAMEWORK FOR -RBA GOV LOWE SAYS  A FLEXIBLE MEDIUM-TERM TARGET IS THE BEST WAY FOR US TO DELIVER LOW AND STABLE INFLATION IN A WAY THAT CONTRIBUTES TO OUR OTHER BROAD RESPONSIBILITIES -RBA GOV LOWE SAYS  WE EXPECT THE ECONOMY TO CONTINUE TO BE SUPPORTED BY LOW INTEREST RATES AND THE DEPRECIATION OF THE EXCHANGE RATE SINCE EARLY 2013 -RBA GOV LOWE SAYS HOUSING SITUATION IS SOMEWHAT MORE COMFORTABLE THAN IT WAS A YEAR AGO, ALTHOUGH WE CONTINUE TO WATCH THINGS CAREFULLY -RBA GOV LOWE SAYS OUR JUDGEMENT IS THAT PAST EASING IN MONETARY POLICY IS SUPPORTING JOBS AND ECONOMIC ACTIVITY -RBA GOV LOWE SAYS BOARD VERY CONSCIOUS THAT RATE CUTS MEAN LOWER INTEREST INCOME FOR SAVERS  -RBA GOV LOWE SAYS THE ECONOMY IS ADJUSTING REASONABLY WELL TO THE UNWINDING OF THE BIGGEST MINING INVESTMENT BOOM IN MORE THAN A CENTURY -RBA GOV LOWE SAYS RECENT GDP DATA A LITTLE ABOVE MOST ESTIMATES OF TREND GROWTH IN OUR ECONOMY.  -RBA GOV LOWE SAYS  STORY ON INCOME GROWTH HAS BEEN LESS POSITIVE, WITH GROWTH IN NOMINAL GDP BEING DISAPPOINTING -RBA GOV LOWE SAYS IMPORTANTLY, THE DRAG FROM THE FALL IN MINING INVESTMENT WILL COME TO AN END -RBA GOV LOWE SAYS LOW WAGE GROWTH AND LOWER COMMODITY PRICES HAVE MEANT THAT CPI INFLATION HAS BEEN QUITE LOW OVER RECENT TIMES -RBA GOV LOWE SAYS  IF THESE INCREASES WERE TO BE SUSTAINED THEN WE COULD LOOK FORWARD TO THE DRAG ON NATIONAL INCOME FROM FALLING COMMODITY PRICES COMING TO AN END -RBA GOV LOWE SAYS RECENT NEWS ON COMMODITY PRICES HAS BEEN A BIT MORE POSITIVE THAN IT HAS BEEN FOR A WHILE -RBA GOV LOWE SAYS HOUSEHOLD CONSUMPTION GROWTH HAS BEEN OK, NOT FAR FROM TREND -RBA GOV LOWE SAYS A LOWER AUD WOULD BE HELPFUL -RBA GOV LOWE SAYS , BUT OF COURSE MOST CENTRAL BANKS WOULD LIKE LOWER CURRENCIES -RBA GOV LOWE SAYS UNDERSTANDABLE WHY AUD HAS RISEN OVER RECENT MONTHS, BUT GOOD IF A BIT LOWER -RBA GOV LOWE SAYS LABOUR MARKET STORY POSITIVE OVERALL, CAN LOOK FORWARD TO REASONABLE JOBS GROWTH -RBA GOV LOWE SAYS LABOUR MARKET NOT AS STRONG AS HEADLINE UNEMPLOYMENT RATE SUGGESTS -RBA GOV LOWE SAYS VERY UNLIKELY RBA WILL RUN OUT OF POLICY ROOM -RBA GOV LOWE SAYS GOVERNMENT COULD USE BALANCE SHEET TO BORROW TO FUND INFRASTRUCTURE INVESTMENT -RBA GOV LOWE SAYS WOULD BE WATCHING MARKET REACTION SHOULD TRUMP BE ELECTED -RBA GOV LOWE SAYS DO NOT HAVE A PARTICULAR CONTINGENCY PLAN FOR MARKETS SHOULD DONALD TRUMP BE ELECTED US PRESIDENT -RBA GOV LOWE SAYS FURTHER CUT IN RATES IS POSSIBLE, DEPENDS ON WHOLE RANGE OF FACTORS -RBA GOV LOWE SAYS POCKETS OF SPARE CAPACITY IN CHINESE ECONOMY, BUT DO NOT WANT TO OVERSTATE THE PROBLEMS
by QuantumLogicTrading
AUSSIE - AUDUSD: RBA MINUTES HIGHLIGHTSRBA minutes broadly neutral on the margin. Aussie rates (30 day bills) are implying a 5% chance of an October 25bps cut. In general we've seen aussie rates firm up, with 30d bills moving from 7% last week and 9% the week before to now 5%, this firming/ steepening has been the general consensus further along the maturity curve where rate cut hopes are diminishing in AUD as speculation regarding a nearing RBA terminal rate/ housing market issues dampening expectations. Feb/ March 2017 is where we see a "dip" in rates or a spike in cut hopes, with there currently being 12/13bps of cuts into these dates - there seems to be an accumulation of institutional macro expectations of an RBA cut in March. Beyond here we see diminishing basis point cuts:time with the May to July differential being only 1bps (from -16bps in May to -17bps in Jun/ July). The driver for AUDUSD will likely be FED/ USD induced. AUD will provide a firm base, but has continued risk of cross selling from AUDNZD as kiwi at 2.00% remains the leading G10 carry trade. Both kiwi and aussie have the ability to push higher and maintain these higher levels if the fed confirms one hike this year, which puts the fed a hike behind the curve. RBA MINUTES: JUDGED CURRENT STANCE OF POLICY CONSISTENT WITH GROWTH, INFLATION TARGETS - Steady Decision Took Into Account Rate Cuts In May And August, Recent Data - Estimated Around Half Of The August Rate Cut Had Been Passed On To Bank Customers - Repeats Rising A$ Would Complicate Economic Rebalancing - Decline In A$ Since 2013 Continued To Support Traded Sector Of Economy - Data Suggest Economy Growing In Line With Potential - Forward Indicators Consistent With Little Change In Unemployment Rate In Coming Months - Cost Pressures, Wage Growth Set To Remain Low For Some Time - Conditions In Established Housing Market Had Generally Eased, House Price Growth Moderated - High Home Building Approvals Pointed To Significant Amount Of Work In Pipeline - Economic Drag From Falling Mining Investment Looked To Have Peaked In 2015/16
by QuantumLogicTrading
AUSSIE - AUDUSD: RBA MINUTES HIGHLIGHTSRBA MINUTES: JUDGED CURRENT STANCE OF POLICY CONSISTENT WITH GROWTH, INFLATION TARGETS - Steady Decision Took Into Account Rate Cuts In May And August, Recent Data - Estimated Around Half Of The August Rate Cut Had Been Passed On To Bank Customers - Repeats Rising A$ Would Complicate Economic Rebalancing - Decline In A$ Since 2013 Continued To Support Traded Sector Of Economy - Data Suggest Economy Growing In Line With Potential - Forward Indicators Consistent With Little Change In Unemployment Rate In Coming Months - Cost Pressures, Wage Growth Set To Remain Low For Some Time - Conditions In Established Housing Market Had Generally Eased, House Price Growth Moderated - High Home Building Approvals Pointed To Significant Amount Of Work In Pipeline - Economic Drag From Falling Mining Investment Looked To Have Peaked In 2015/16
by QuantumLogicTrading
1
AUDCAD: Good chance to longWe can take this long here, risking a drop under 0.97612. Target is not set in stone, but watch how it evolves. We're testing a critical support level, but also facing considerable resistance, so we might have to be patient. I still think the trend will continue to be up, so, not a huge concern to hold this. Good luck! Ivan Labrie. PS: I had a moderator comment on my publication format, for now, I'm keeping it brief, but message me if interested in my services. I will post trades on and off, but there are quite a few I reserve for my private clients.
Long
by IvanLabrie
SHORT GBPNZD: CARRY TO OUTPERFORM; LOWER BOE EQUILIBRIUM?GBPNZD: 1. Wanted to repost my view on GBPNZD - remain short on rallies here into 1.82 with a 1.80, 200pip target. 2. This whole week weve remained strictly rangebound and sterling kiwi has paid every time (about 10) on shorts at the 1.810 level so i will continue this view at 1.82 given: 1) NZD carry continues to be the highest in G10 so Kiwi demand will likely hold up for the foreseeable future especially on BOE fwd guidance - though UK data outperforming in the near term could continue to put sterling topside pressure though the long game i dont expect this to last. 2) Sterling looks overbrought on the daily at these levels some 400pips higher than BOE monpol lows, here imo is the true home for GBPNZD given I expected the lean for further easing to be on BOE vs RBNZ as kiwi house prices will continue to prevent aggressive easing (as Wheeler pointed out earlier this week - rapid easing isnt going to happen). Risks: 1. Technically, on sterling demand I think risk is to the 1.83 resistance level, I dont think sterlingkiwi has much more given the amount of resistance we have found down at 1.81. 2. AUDNZD Re-balancing - there looks like there may be a AUDNZD rebalancing higher after 2wks of selling, this could shift GBPAUD aussie shorts into kiwi shorts vs GBP, though the AUDNZD movement higher looks to be struggling to gain traction given the differential of 50bps remains the bottom line, and weak fwd guidance from both RBA and RBNZ makes it difficult to differerentite the two (not to mention aussie data has been less firm in recent times vs kiwi). 3. UK PMI - UK PMIs next week, if outperforming will likely give GBP bulls more fuel to own sterling, given it is economic revisions recently higher that has been the fundamental reason for sterling topside - so further leading indications from PMIs could continue this trend, though given the move already higher, 1.82 could be the ceiling here (though watch out for a AUDNZD equilibrium higher which would make gbpnzd move through 1.82). If the PMIs were to show any figure above 50, expect an aggressive 300pip+ movement higher. 4. USD hiking risk - USD strength will cause NZD yield seeking supply as investors shift into USD markets instead.. as we have seen today with the spike higher, continued USD rate performance will drag on NZD longs in the medium term.
Short
by QuantumLogicTrading
SELL GBPAUD: STRAT TRADE - 7 DAYS UP P=99.746% 8TH DAY LOWERb]GBPAUD: 1. Sterlingaussie has been aggressively bid higher for the last 7-days on the back of sterling data outperforming last week, broad aussie weakness and a general recovery from lows. 2. Statistically, after analysing the last 16.5yrs of data it shows the probability of a 8th day or more of buying is 0.254% which means there is an implied 98.78% chance that we move higher today - I like these odds so will add a short here. - If we were to see another day of buying, a 8th day, then the probability of a 9th day is even better on the sell-side odds of 99.918% so i will add to shorts if this is the case - the max number of buying days in GBPAUD has been 10d once and 9d 3 times, 8d 7 times. 3. Plus aussie 30 bill rates firmed up on monday implying only a 5% chance of a september cut down from 8% of the past week, and sterling OIS rates came off from Fridays rally after the market decided to fade last weeks data. - Also we have found some technical price resistance at the 1.72 handle so being short here makes sense. Trading strategy - GBPAUD Sell @1.740: 1. Short GBPAUD pretty much at market TP should be 100-200pips lower. 2. Short small and add if we move higher again on thursday - friday imo is the most likely day for a sterling sell-off as shorts are squared up on profit taking. 3. I also like being short gbpnzd and gbpusd from 1.81 and 1.325 - both have 100-200 easy pips - especially on a UK GDP miss on friday.
Short
by QuantumLogicTrading
6
SELL GBPAUD: STRAT TRADE - 5 Days up P=98.78% 6TH DAY LOWERGBPAUD: 1. SterlingKiwi has been aggressively bid higher for the last 5-days on the back of sterling data outperforming last week, broad aussie weakness and a general recovery from lows. 2. Statistically, after analysing the last 16.5yrs of data it shows the probability of a 6th day or more of buying is 1.22% which means there is an implied 98.78% chance that we move higher today - I like these odds so will add a short here. - If we were to see another day of buying, a 6th day, then the probability of a 7th day is even better on the sell-side odds of 99.45% so i will add to shorts if this is the case - the max number of buying days in GBPAUD has been 10 once and 9 3 times. 3. Plus aussie 30 bill rates firmed up on monday implying only a 5% chance of a september cut down from 8% of the past week, and sterling OIS rates came off from fridays rally after the market decided to fade last weeks data. - Also we have found some technical price resistance at the 1.72 handle so being short here makes sense. Trading strategy - GBPAUD Sell @1.721: 1. Short GBPAUD pretty much at market TP should be 100pips lower at the 1.711 level. 2. Also check my previous post of short gbpnzd into rallies at 1.81 and GBPUSD into 1.315-32
Short
by QuantumLogicTrading
4
AUDNZD - STAT TRADE: BUY AFTER A 5TH DAY OF SELLING; P=98.7%AUDNZD: 1. Aussie kiwi has been aggressively sold lower for the last 8/9 days, with the bullday being only 4pips higher (pretty much 9 straight days of selling) and most recently the last 4 days have been pure consecutive closes lower. 2. Statistically, after analysing the last 16.5yrs of data it shows the probability of a 5th day or more of selling is 3% which means there is an implied 32/33/ 97% chance that we move higher on the next day, these odds arent too great so I suggust NOT buying on open, instead lets wait and see if we can get another close lower on the daily that takes us into the strong support zone at 1.041/3 - then this will mean buying the probability that a 6th or more day of selling occurs which is 1.3% or an implied chance of 98.7% or 99/100 that the price will go up on the 6th day Trading strategy - AUDNZD wait for monday to close lower at 1.041/3 and buy tuesdays open: 1. I advise buying aussie here after the 5th day lower as the 6th day has a 98.7% chance of moving higher, after a 5th day of selling, the odds are good and I will take part in this.
Long
by QuantumLogicTrading
5
SELL EUR V AUD, USD, NZD: ECB MONETARY POLICY MINUTES HIGHLIGHTSAfter 5days higher EUR$ Statistically is a 80th percentile sell opportunity - the monetary policy minutes were dovish on the margin reiterating and stressing the ECB's willingness to "Boost stimulus again if needed". This should put downside pressure on EUR given september meeting is coming up (when most likely to add to easing). EURAUD and EURUSD shorts here look technically the best and fundamentally with EURNZD also possible and an alternative for EURAUD (depends on your preference - higher differential = NZD; weaker monpol fwd guidance/ future rate stability = AUD). ECB Monetary Policy Minutes Highlights: ECB SAYS "WIDE AGREEMENT" AMONG COUNCIL MEMBERS NOT TO DISCUSS ANY MONETARY POLICY REACTION AT JULY 20-21 MEETING -Brexit Vote Created New Headwinds for Eurozone Economy, Heightened Uncertainty-ECB Minutes -Brexit Vote Could Affect Global Economy in Unpredictable Ways-ECB Minutes -Policymakers Stressed ECB's Readiness to Boost Stimulus Again if Needed-ECB Minutes -Policymakers Thought it Was Too Soon to Discuss Fresh Stimulus-ECB Minutes -ECB Saw Market Impact of Brexit Vote "Contained"-ECB Minutes -Policymakers Stressed Need To Safeguard Transmission of ECB Policies Through Banks-ECB Minutes -Policymakers Noted Apparent Link Between Bank Stock Prices, Bank Lending Volumes-ECB Minutes ECB ACCOUNT OF MONPOL MEETING -Called For Measures To Address Weak Profitability -No Clear Upward Trend In Inflation Path -Premature To Discuss Fresh Stimulus ECB'S PRAET: CALLS WEAK PRICES AN 'ONGOING SOURCE' OF CONCERN
Short
by QuantumLogicTrading
SHORT GBP VS AUD, NZD, USD: FADE RALLIES - RETAIL SALES BEATRetail sales outperformed on all cylinders today and GBP as expected has rallied into nice shortable levels now - with brexit uncertainty likely to continue to way and continued dovish BOE support also equally weighing on sterling in the future. My preferred shorts immediately are vs USD as i expected Fed Dudley and Williams (speaking today) to talk the extremely battered USD higher (as they did earlier in the week). I also like medium-term (end of next week shorts) vs NZD and AUD as GBPAUD and GBPNZD come into nice resistance at 1.81 and 1.713, after closing two days with both aussie and kiwi weaker i think this third day higher will be the last and thus a high probability opportunity to short GBP - I also like these AUD and NZD longs given the above average employment reports from both NZD and AUD this week which seemingly are yet to be priced vs GBP. Further the medium term view vs AUD and NZD of short GBP derives from the trend - where you can see GBP has lost 1000pips post brexit as the implied interest rate differential between GBP and AUD/ NZD has increased and is projected to increase as BOE ease rates and AUD and NZD rates are likely to remain stable (especially AUD given the SOMP and RBA minutes). Whilst NZD rates remain at the pinnacle of 2% so even if the RBNZ does ease as expected the differential between sterling and kiwi will remain the highest for yield seekers for the next 50bps lower, which is likely to be neutral. Trading strategy - Short GBP vs AUD, NZD, GBP in proportionate SMALL lots and add if higher: 1. Short GBPUSD @1.317 - 1.305/8TP1 1.290TP2 2. Short GBPAUD @1.713 - 1.693TP1 1.673TP2 3. Short GBPNZD @1.81 - 1.7910TP1 1.777TP2 I also like this strategy given the 3-way exposure net hedges any individual cross risk e.g. aud nzd or usd.
Short
by QuantumLogicTrading
2
AUDUSD LONG: RBA GOV STEVENS SPEECH HIGHLIGHTS"It's a search-for-yield world and this country still looks attractive because other yields look so unattractive," Mr. Stevens said in a joint interview with The Wall Street Journal and the Australian newspaper ahead of his retirement next month. "That's not something that the Reserve Bank can wave a wand and make go away." The below and above support my bullish AUD$ view, the RBA/ Gov Stevens seems to have accepted and become contempt somewhat that AUD appreciation will continue in an era of low global interest rates as ive said before/ earlier. I continue to like AUD$ to 0.78 12m highs, on the back of weak US CPI.. USD currently seeing some bids on the back of Fed Dudleys hawkish comments (attached), but i nonetheless think CPI will be the lasting word on the USD front and will help AUD$ bid up to the 0.78 level. USD strength comes as a function of the fed funds futures which are up at 18% probability of a sept hike vs 9% yesterday, though this should be faded into days end as the CPI weakness takes over RBA Gov Stevens Speech Highlights: RBA Gov. Stevens: World Economy Ready for U.S. Rate Rise RBA Gov. Stevens: Stronger GDP Growth Rates Would Be Welcomed RBA Gov. Stevens: Should Be Possible to Expand Budget, Retain AAA-Rating RBA Gov. Stevens: House Prices Must Still Be Watched Carefully RBA Gov. Stevens: Worrying Knowledge Gap Around China Economy RBA Gov. Stevens: Cash Rate Just One Variable for Australian Dollar Level RBA Gov. Stevens: High Yields in Australia in Infrastructure, Property RBA Gov. Stevens: Hard to Wave Away Demand for Australian Dolla RBA Gov. Stevens: Australian Housing Not in Risky Category RBA Gov. Stevens: Housing Debt Is Significant RBA Gov. Stevens: No Fresh Surge in Housing Leverage RBA Gov. Stevens: Housing Slump Would Not Lead to Systemic Risk RBA Gov. Stevens: Housing Slump Would Not Trigger Bank Failures
Long
by QuantumLogicTrading
5
AUDUSD: RBA MINUTES - NEUTRAL & NO COMMITMENT TO FURTHER ACTIONMinutes were neutral with little hints to further action, much of which inline with the SOMP - if anything it was on the hawkish side given they expect "inflation to be improved by easing" which infers they think policy stable at 1.50% might be sufficient. Though they did go on to say "AUD$ rise could cause complications" though it was kept to a very limited sense (mining industry) and it certainly didnt suggest further easing was on the horizon if it persists. So Aussie from here, with the continued lack of fwd guidance from the RBA i see higher, as posted several days ago - given the 6-9m trend which looks to be yield seeking given the largest economies have slipped into negative rates (ECB, BOJ) and the BOE soon to follow (plus FOMC seem to have adopted a much flatter hike trajectory) thus i expect this bullish sentiment to continue to put topside pressure on aussie (particularly as the RBA have offered little reason for speculators to stay away) as investors continue to seek carry. Trading Strategy: Bullish - Buy Kiwi and Aussie @Market - careful of US Data. 0.773 and 0.779 (0.73 kiwi) look to be the next targets higher - risks to the view are obviously a firming USD through data improvement (given this is the Feds biggest mandate for future hikes), but given the recent data environment this seems unlikely, where i expect CPI today to miss too given retail sales and PPI (CPI Leading indicators) missed heavily last week - this should cause USD STIRs to sell-off again, push rate hopes for sept/ dec back lower and USD weaker + the presidential election i hear is becoming a somewhat constant drag on the USD, even if the rate expectations sell-off subsides. Kiwi has slightly more fwd guidance from the RBNZ with Oct/ November cut on the cards - whilst this may seem encouraging remember kiwi rates trade at 2.0% still vs 1.5% aussie which is a 50bps differential - not to mention that being 200bps+ vs rest of G10.. so kiwi topside is likely expected even though there was some average further monpol suggested as kiwi rates have to come down quite aggressively until they are even at par with aussie, let alone not the no.1 yield currency or closer to the average in G10.. until this point the antipodes will continue to be chased higher imo as investors seek easier yields . RBA Minutes Highlights: -RBA MINUTES: AT AUGUIST MEETING JUDGED PROSPECTS FOR GROWTH, INFLATION WOULD BE IMPROVED BY EASING -RBA MINUTES: BOARD SAW DIMINISHED RISKS FROM HOUSING DEBT, RISING HOME PRICES -RBA MINUTES: ROOM FOR STRONGER ECONOMIC GROWTH GIVEN INFLATION TO REMAIN LOW FOR SOME TIME -RBA MINUTES: HOUSE PRICES, AUCTION RATES, MORTGAGE LENDING POINTED TO COOLING MARKET -RBA MINUTES: RISING A$ COULD COMPLICATE TRANSITION FROM MINING BOOM -RBA MINUTES: FORWARD INDICATORS OF JOBS GROWTH POINTED TO STEADY UNEMPLOYMENT IN COMING MONTHS -RBA MINUTES: CONSIDERABLE UNCERTAINTY ABOUT MOMENTUM IN LABOUR MARKET, INFLATION OUTLOOK -RBA MINUTES: GDP GROWTH LIKELY TO BE MORE MODEST IN Q2, AFTER STRONG Q1 -RBA MINUTES: UNEMPLOYMENT EXPECTED TO DIP ONLY SLOWLY TO 5.5 PCT BY 2018, LEAVE SLACK IN MARKET -RBA MINUTES: SUPPLY OF NEW HOMES TO KEEP RENT INFLATION AT LOW LEVELS -RBA MINUTES: PIPELINE OF HOME BUILDING AT VERY HIGH LEVELS, RISK OF OVERSUPPLY IN SOME MARKETS -RBA MINUTES: REASONABLE CHANCE OF FURTHER STIMULUS GLOBALLY IMPACTING ON CURRENCIES -RBA MINUTES: CHINA STIMULUS SUPPORTING GROWTH THERE, BUT UNCERTAINTY OVER LONGER-TERM OUTLOOK Full Minutes - www.rba.gov.au a
Long
by QuantumLogicTrading
NZDUSD/ AUDUSD: RBNZ GOV WHEELER SPEECH HIGHLIGHTSGovernor of the RBNZ Wheeler offered little bearish pressure on kiwi, refusing to go into any intervention talk and failing to say what the bank will actually use to tame this deflationaire NZD they are experiencing at the moment - with the comments below in mind imo this leaves on direction for Kiwi (short of some FOMC/ USD bullish pressure which seems unlikely as rate expectations continue to be sold-off on the back of a quiet data week) and thats higher - in the speech it became apparent that cutting rates does little to curb kiwi strength given the relative differential remains the highest in G10 in this low interest environment both AUD and NZD rates remain some 50-150bps more attractive for those low risk yield seeking funds. On a break of 0.733 I see NZD$ moving towards 0.76 - though any USD strength could tame the cross, especailly given 60bps of further cuts have been built into the kiwi projections - though given there is 6wks until the next meeting imo there is certainly time for us to move higher before moving lower into the meeting as dovish expectations build as they did before. From here AUD looks more attractive here given their lack of forward guidance, and already breakout levels 0.78 is now the target - USD strength may continue weak given the presidential election.. is it likely the FOMC will hike just before an election e.g. sept or nov? despite their independence this seems unlikely + imo a Dec hike makes the most sense especially as some feds call for some consistency e.g. 12m as it is easier to measure policy transmission this way. One potential downside to this view is USD strength, whilst we seem to be in a wave of relentless selling this could be reversed if it is no election related (though there is little else impetus offered) but nonetheless given AUD's breakout i think the 0.78 target is still fair and given NZDs reaction already - it is unlikely we see sellers from here, this reaction almost mimics the RBA's rate cut reaction e.g. 50pips higher - but that was then followed by 200pips higher 1wk later.. we could certainly be in for the same price action here and this is what my bets are on. RBNZ Gov Wheeler Speech Highlights: -WHEELER: NOT SURPRISED BY NZD MOVE AFTER TODAY'S DECISION -WHEELER: RBNZ HAS BUILT 60BPS OF CUTS INTO PROJECTIONS -WHEELER: NO SERIOUS CONSIDERATIONS OF A 50BPS CUT -RBNZ GOV WHEELER: WOULD LIKE TO SEE MOST OF RATE CUT PASSED ON BY BANKS -WHEELER: THERE IS FLEXIBILITY IN POLICY TARGETS AGREEMENT -WHEELER: WANT NZD TO FALL, WANT TO TAKE PRESSURE OFF NZD WITH LOWER RATES -WHEELER: DEBT TO INCOME TOOL UNLIKELY TO BE IMPLEMENTED THIS YEAR -WHEELER: WAGE MODERATION GREATER THAN RBNZ EXPECTED -WHEELER: RBNZ HAS LIMITED INFLUENCE OVER NZD -WHEELER: WOULD BE CONCERNED IF THERE WAS A FURTHER DROP IN ST INFLATION EXPECTATIONS -WHEELER: WILL LOOK AT NZD REACTION OVER COMING DAYS
Long
by QuantumLogicTrading
1