* Eur/Usd has moved higher since yesterday
I took profit on my short Eur/Usd position as spot broke through 1.3350.
Alledgedly there are real money on the bids today. Whether that is an indication that we will see a correction higher or not well have to see. A consolidation/correction might very well take place here but any move higher should be capped in the 1.3530 area or Ill reevaluate. Til then 1.30 will remain my near term target. I will be looking to reenter short Eur/Usd positions.
* Equities correcting lower; take profit/squeeze friday?
Not to me. Equities looks toppish and should cave in before long. Im running short equity positions on US and European indexes, spiced with some shorts on weak banks, looking for a 10% move nearterm. Ill stop out and reevaluate if indexes push above their highs from yesterday.
As usual, good luck
The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.
Trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
Errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice."www.todaysmacrotrading.blogspot.com" will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
© 2008 "www.todaysmacrotrading.blogspot.com:The traders blog" All Rights Reserved.
25 March 2010
Greece;"Old" Plan "B" is launched, lower Eur, Equities to follow.
* German profile on Greece rescue plan increasing pressure on the Euro
Focus now on yield curves; with yet more European peripheral deflationary pressure unleashed and US yield curve steepening, the scene is set for a lower Eur/Usd still.
It seems the EU rescue plan for Greece is a copy of a German proposal presented three weeks ago. And as such, it is not really "new". Anyhow, the proposal is short on detail and will certainly mean severe hardship for the citizens of Greece. They are about to share the Latvian people´s experience. Question is, will the Greece citizens handle the hardship in a similar way? I doubt it. To me, civil unrest risks are higher in Greece.
EU politicians are hardly united, but more importantly, the ECB is voicing quite strong objections against any IMF led resue plan, emphasising an EU led solution. Markets will want more details on the proposal, translated into concrete action. I does not seem we will get it for the time being.
* Eur/Usd to go lower still
With a steepening US yield curve and longer end long term correlation to break up with the European ditto and Europe facing yet another wave of deflation initiated by Greece and upcoming fiscal budgetary measures for the other southern European PIIGS countries represented by Spain and Portugal, Eur/Usd should be heading lower still. The 1.30 level is within striking distance.
* Eur/Usd, US yield and equities
There has been a breakup there for a while now. However, I believe equities will play catch up. Ie equities will soon go lower. US yields will be important to watch as any move by the 10 year bond above 4% - 4.25% is likely to make many institutional investors consider scaling back on their equity holdings. With equity vols at close to pre crisis low levels, long equity puts seems an interesting proposition. The timing seems to be right. Famous last,,,,
* Usd/Jpy going higher
Japanese institutional flows to seek higher yields abroad post fiscal year end as Japan is going back to QE. Besides, majority of outflows during this fiscal year has been currency hedged by Japanese institutions, buying Jpy in the process. Going forward, due to the Japanese QE and the Usd strength, the FX hedging ratio may well be lower, meaning less Jpy buying.
The important 91 level in Usd/Jpy has broken to the topside. I go for a continuation towards the high nineties.
As usual, good luck.
The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.
Trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
Errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice."www.todaysmacrotrading.blogspot.com" will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
© 2008 "www.todaysmacrotrading.blogspot.com:The traders blog" All Rights Reserved.
Focus now on yield curves; with yet more European peripheral deflationary pressure unleashed and US yield curve steepening, the scene is set for a lower Eur/Usd still.
It seems the EU rescue plan for Greece is a copy of a German proposal presented three weeks ago. And as such, it is not really "new". Anyhow, the proposal is short on detail and will certainly mean severe hardship for the citizens of Greece. They are about to share the Latvian people´s experience. Question is, will the Greece citizens handle the hardship in a similar way? I doubt it. To me, civil unrest risks are higher in Greece.
EU politicians are hardly united, but more importantly, the ECB is voicing quite strong objections against any IMF led resue plan, emphasising an EU led solution. Markets will want more details on the proposal, translated into concrete action. I does not seem we will get it for the time being.
* Eur/Usd to go lower still
With a steepening US yield curve and longer end long term correlation to break up with the European ditto and Europe facing yet another wave of deflation initiated by Greece and upcoming fiscal budgetary measures for the other southern European PIIGS countries represented by Spain and Portugal, Eur/Usd should be heading lower still. The 1.30 level is within striking distance.
* Eur/Usd, US yield and equities
There has been a breakup there for a while now. However, I believe equities will play catch up. Ie equities will soon go lower. US yields will be important to watch as any move by the 10 year bond above 4% - 4.25% is likely to make many institutional investors consider scaling back on their equity holdings. With equity vols at close to pre crisis low levels, long equity puts seems an interesting proposition. The timing seems to be right. Famous last,,,,
* Usd/Jpy going higher
Japanese institutional flows to seek higher yields abroad post fiscal year end as Japan is going back to QE. Besides, majority of outflows during this fiscal year has been currency hedged by Japanese institutions, buying Jpy in the process. Going forward, due to the Japanese QE and the Usd strength, the FX hedging ratio may well be lower, meaning less Jpy buying.
The important 91 level in Usd/Jpy has broken to the topside. I go for a continuation towards the high nineties.
As usual, good luck.
The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.
Trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
Errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice."www.todaysmacrotrading.blogspot.com" will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
© 2008 "www.todaysmacrotrading.blogspot.com:The traders blog" All Rights Reserved.
19 March 2010
Low rates, low vol - what more can assetmarkets ask for?
* CB;s are clinging to QE, but the correlation in long duration bonds between Us and Europe is likely to break up, generating increased assetvolatility in the process.
We are entering a new phase where many western countries will find themselves in a situation where synthetically low rates is increasingly making a workable exitplan very difficult.
My guess is that Centralbanks will wait too long before they raise rates, risking stagflation to develop pre raising. Once they do raise they will be unnecessesarily far behind the curve, generating a swift and drastic rate rise once the trigger is pulled.
* Whats happening next then?
Greece still in focus, and may remain there for a while still, as the Greece April and May refinancing is rapidly approaching. Otherwise, it seems the headline frequency would indicate it is a bit overdone.
Nearterm I am positioned for lower equitymarkets, banksectors and Eur/Usd, weaker Zar and Try.
* The Swedish bullcase
The increased focus on sovereign debt has served Sweden well, since Swedish finances, from a relative perspective is doing quite well. A word of caution is warranted here however.
1) This is now a clear consensus trade by every category of the market.
2) Europe and Sweden has not cleaned up their toxic assets in the same way US has. Sweden and their baltic assets being a case in point. Swedbank still has baltic assets valued at very weird levels; Swedbank lost 11Bn SEK last year, they have baltic goodwill valued at 12 Bn SEK.
This equates to the board expecting a 6%-7% annual growth for the Baltic assets for the next 30 years!
Now, thats a crystalball for you.
The Baltics is still an unstable asset area no matter what the banks say,
3) Sweden is one of the few countries where the vast majority of household loans are floating shortterm rates. and loanvolumes are still rising sharply,,,,,,, Should/when the Riksbank be forced to sharp interestrate rise,,,,
Well see,,,,
Anyway, short term I expect weaker SEK assets.
As usual, good luck
The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.
Trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
Errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice."www.todaysmacrotrading.blogspot.com" will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
© 2008 "www.todaysmacrotrading.blogspot.com:The traders blog" All Rights Reserved.
We are entering a new phase where many western countries will find themselves in a situation where synthetically low rates is increasingly making a workable exitplan very difficult.
My guess is that Centralbanks will wait too long before they raise rates, risking stagflation to develop pre raising. Once they do raise they will be unnecessesarily far behind the curve, generating a swift and drastic rate rise once the trigger is pulled.
* Whats happening next then?
Greece still in focus, and may remain there for a while still, as the Greece April and May refinancing is rapidly approaching. Otherwise, it seems the headline frequency would indicate it is a bit overdone.
Nearterm I am positioned for lower equitymarkets, banksectors and Eur/Usd, weaker Zar and Try.
* The Swedish bullcase
The increased focus on sovereign debt has served Sweden well, since Swedish finances, from a relative perspective is doing quite well. A word of caution is warranted here however.
1) This is now a clear consensus trade by every category of the market.
2) Europe and Sweden has not cleaned up their toxic assets in the same way US has. Sweden and their baltic assets being a case in point. Swedbank still has baltic assets valued at very weird levels; Swedbank lost 11Bn SEK last year, they have baltic goodwill valued at 12 Bn SEK.
This equates to the board expecting a 6%-7% annual growth for the Baltic assets for the next 30 years!
Now, thats a crystalball for you.
The Baltics is still an unstable asset area no matter what the banks say,
3) Sweden is one of the few countries where the vast majority of household loans are floating shortterm rates. and loanvolumes are still rising sharply,,,,,,, Should/when the Riksbank be forced to sharp interestrate rise,,,,
Well see,,,,
Anyway, short term I expect weaker SEK assets.
As usual, good luck
The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.
Trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
Errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice."www.todaysmacrotrading.blogspot.com" will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
© 2008 "www.todaysmacrotrading.blogspot.com:The traders blog" All Rights Reserved.
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