Bullish turnaround on friday - solid sign?

I was very impressed with the bullish turnaround in the US equity markets last friday. Especially on the back of the disastrous news that day. It makes me wonder whether we will see an US led equity rebound from here. I will be adding to my US equity calls today. Will take it from there. Todays US close will become interesting.
Watch rebounds in Brent Crude Oil, higher 10 year US yields.

The big problem still; Emerging markets.



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.

Went on a trip,,,,

Went on a trip to Lon last week, got back this W/E.

A few observations from the trip;


+ Met up with my brother´s two month old babygirl, his second one - wow she was really tiny, how quickly one forgets... Great to see him and the rest of his family. A lot of fun.

- Not surprisingly, a solidly pessimistic outlook on personal opportunities from people in this business. Many fearing next year. Especially on the sales side. Traders not that concerned, naturally. Hedgefunds with a mixed outlook depending on what strategy they are running. Common concern is and will be withdrawals combined with fee structures. Perhaps also not so surprising, even the ones doing extremely well not expecting to get paid anything close to what they should get.

+ The ones I know have done extremely well, I am very happy for them. They will keep their jobs AND get a bonus.

+ Saw blue skyes everyday! In London!

+ Bars are still there. Even went to a wine bar and worked hard to seek out the best wine.
Hard work, but somebodys got to do it. Loads of laughs with people I know made it a very joyful experience. Thank you.

Remember; There will always be opportunities, and in this market, even more so.



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.

Latvia deval on the backburner,,,,for now.

Sold out my SEB and Swedbankputs on a lucky dip in the stocks around lunch.
Went shorttem short Eur/Sek this AM and just squared it.

Unfortunately for the Latvian population, the max cost alternative for Latvia has been opted for. Hopefully, it is just a spoof and they will deval soonish anyway, otherwise it is just sad. The Latvian economy is now doomed to continue its nuclearlike meltdown before the devaluation takes place.

I will now leave this case on the backburner til there is any new information.
Sek should and have recovered on the back of it. After slicing through the 10.50-54 support area this morning we are now at 10.39, after having reached 10.78 friday evening. We should base in the 10.30 area.
The divergence showed on the charts is something to take seriously though.
Will monitor this one.






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.

IMF says NO DEVALUATION in Latvia

Will follow up on this one.

Swedbank and SEB will rally on the open.
SEK already stronger since this came out yesterday PM.
Divergence on the SEK charts as well.
10.50-10.54 is important support for the Eur/Sek.'
Ive sold most of my long Sek puts, got smalls left.
Still long Bank puts. Will gap higher on the open so will be opportunistic.
Stay posted.




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.

The Baltic wave

Talk that IMF officials were inofficially promoting a depegging of the Lvl in conjunction with an IMF package were officially confirmed by the Latvian finance minister, Atis Slakteris and a finance department spokesperson yesterday.

The COL has already spend 23% of its currency reserves, without any external speculation. The domestic need for hard currency is set to increase. This might very well break the currency regime from within. It seems we are inching closer to a float.

As if the Eastern front wasnt looking gloomy enough, GS earlier in the week released their new Russian forecast. They now expect the RUB to decrease by 25% vs a basket of Eur and Usd for 2009. Well, if they say 25% over a year, the decoded message might perhaps be 40% in 6 months.

It is not looking good, not at all as long as Oil is getting drilled. (Pardon the punt). The Emerging implosion story will have to run its course before assets have a sustained turn. We still have a bit to go there, and there are other waves coming as well, the Russian one, the Chinese one, the Brazil one, etc etc
Sounds too bearish? Perhaps, but Im just calling it as I see it.

We aint seen nothing yet when it comes to Emerging market yield curve steepenings. This seems to be an opportunity knocking together with the ensuing currency weakness. For individuals it might be tricky getting access to this one. For institutional market participants, it is easy peasy

Eur/Sek to test the all time highs of 10.68, targeting 11.00 on a break. A float could take it beyond that though.
My guesstimate would be that SEB and Swedbank would be diving for 25 and 15 Sek respectively, on a float.
I am increasing my long Swedbank and SEB puts, Sek puts vs Euro on the back of it.

As always, 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.

Competitive devaluations to come in the BIG one? and Australian consequences

Usd/Cny has gained for two straight days now(0,6% and 0,26% respectively), closing at the high of its trading band. Nothing strange with that initself. Why is that then? Well, the Chinese PMI yesterday fell from 44.6 to 38.8.
Chinese assetclasses are all way down this year.

Worries are now arising whether China will make dear policymistakes in adressing the falling domestic demand situation. Last week they already made one when they cut their exportduties, increasing competitiveness within an already falling market. This will increase deflationary pressures globally and weigh on equity markets going forward. (Admittedly, PBOC later today denied that the recent weakening of the CNY was part of any policy shift.) Eur/Usd bounced higher from 1,2570 up to 1,27 plus on the back of it.

Unfortunately, there is a real threat of this taking place as other countries have already started the competitive devaluation race in the face of falling domestic demand. The difference here is,,,,, the difference. China alone has the power to export deflation globally by itself. Not good. Also,,,, remember, China received massive inflows of speculative capital over the last years. A significant share of which is Usd funded.

This still represents a gigantic short Usd position. With Chinese equities and realestate getting hit a weakening CNY could be the trigger for another big wave of Usd buying. Not to mention the situation of other Usd thirsty emerging market countries such as Russia and perhaps soonish, Turkey.

If so, the Aud will come under renewed pressure as commodity prices would be presured further and global risk aversion would increase. China is the biggest export destination for Australia as well. The RBA cut rates by 100 BP today, but real rates are still too high at 0,95% (Nominal 4.25%, inflation 3.3%) in this credit crunching environment. The Aud should remain under pressure.

Going forward, the adjustment process for emerging market will become a very significant factor. In the process of staving off falling domestic, demand many will be tempted in using the currency tool. This will include emerging market countries and China. To be monitored.







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.

A new month,new opportunities

Going into the month, I have a few main themes;

1) The rebound in US bank stocks
2) The Baltics - Scandinavian Banks - Swedish currency domino dilemma
3) Russia, Turkey, South Africa and CEE`s downward slide gathering pace


1) The US bankstocks rebound from last week will most likely stop today, at least temporarily.
In light of last weeks positive developments; VIX falling off a cliff, credit and mortgage spreads tightening, I will focus on whether US banks stocks will fare any better than their European counterparts. Looking for any break up in correlation.

Overall, on a relative basis, it seems to me there is more gloom and doom to come out of the Eurozone from here. Lets face it, the Euroarea itself sits with all PIGS countries running unsustainable deficits already, and we havent passed Zenit as of yet. Those CDS spreads are not looking good. I guess the Maastrichtcriterias are out of the window from here on. In this environment, those countries will realise that "debt lasts, assets dont". Fiscal stimulus or Zero rate policy, anyone? Skip the talk about joining the Euro. Ask how long will it last instead. The strains could become overwhelming in this recession.


2) IMF releasing terms and conditions regarding their loan to Latvia this week. If Ukraine is anything to learn from, the UAH has been allowed to slide in line with IMF recommendations. The fact that BOL only has reserves for another 9 months if they keep on supporting the LVL at the current pace provides a clue. One should also notice that there is no external speculation in the LVL due to the wide forward spreads. The outflows stem from internal flows combined with the Scandinavian and Swedish banks covering their needs. With an imploding economy, empirical and logical evidence should point in the direction of a float, sooner rather than later. This despite official assurances of the opposite. Scandinavian and Swedish banks should suffer if so. So should the SEK. Will review timetable post this week.


3) These countries downwardslide has gathered pace recently and it seems like we should see more evidence in assets there deteriorating going forward. This will hurt Europe the most.
Turkey has alledgedly been receiving quite a bit of FDI and realmoney flows from the Gulf states up til now, helping Turkey in avoiding a steeper downturn. Those flows are now drying up and Turkey will surely need all the IMF money they can get. the sticking point with IMF at the moment is the fiscal discipline area, where Turkeys current government is trying to avoid the IMF straightjacket. Russia is sliding and CEE ditto. The process of steeper yieldcurves, weaker local currencies is already in progress. Europe will be hit hard.




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.