* CHF - time for some SNB intervention?
Regular SNB meeting today. With the Swiss TWI at the high end of the last six month range and the current market speculative long CHF positioning at the ditto for the last four years, variables are certainly in line for a successful round of intervention.
Even without intervention, a squeeze looks increasingly likely. In any case, I have ventured long both in cash and via options in Eur/Chf.
*Risky assets are continuing to move higher, driven by yields and leverage due to low yields.
The misallocation in process is massive. Til further notice, this is the game in town. However, many of these assets are increasingly looking crowded and overbought, increasing the risks for squeezes from here. especially as the Pittsburg G20 is approaching.
*New positions and positionchanges
- T/P on my long NCC stock, the realestatedeveloper, after a 5% move in 3 days.
- Bought Eur/Chf spot and Eur Calls/Chf puts
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.
17 September 2009
15 September 2009
Awaiting the Pittsburg G20 - walking a tightrope.
* How will the policymakers balance this one?
So, inflating assets to bring balancesheetrelief for the financialsector is the "thing". Sounds to me like this globalposition will need extremely close monitoring and riskmanagement. Problem is, there are essentially no efficient riskmanagement measures at this stage. Misallocations and "total" (state plus private) debt is simply too high. There is a limit as to how much can be offloaded to taxholders. That limit cant be too far off.
* Walking the tightrope
Simply put. If the measures succeed, assetmarkets will continue to rise. Once assetprices brings relief to the balancesheets, the creditplug becomes unstuck.
Once the credit plug becomes unstuck, monetary policy will have to become tight in order to dampen inflation. This will drag assetmarkets lower. Stagflation will become a problem to be solved. In past history, stagflationenvironments have been fought by tight monetary policy and lax fiscal ditto. Consumers purchasingpower will suffer heavily and governments tax revenues ditto.
If the measures do not succeed and economies roll back into recession, there will not be much ammo left to utilise. Then bad assets/debt will come back to bite hard, plunging equities below the 2008 November lows.
Right now we are in a sweet (temporary) spot. Very good balance will be required from here. The probability for success is very much dependent on emerging markets growth.
Markets, Corporates and households are currently trying to utilise (whenever available) as much credit as they can for investments, production, exports and consumption. Investors might join the rally, but I suggest they should be wary of believing the story. Currently, the consensusview is that we have seen the bottom.
* New positions and positionchanges
- Bought NCC stock, the realestatebuilder
- Took profit on my short Usd/Jpy spot
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.
So, inflating assets to bring balancesheetrelief for the financialsector is the "thing". Sounds to me like this globalposition will need extremely close monitoring and riskmanagement. Problem is, there are essentially no efficient riskmanagement measures at this stage. Misallocations and "total" (state plus private) debt is simply too high. There is a limit as to how much can be offloaded to taxholders. That limit cant be too far off.
* Walking the tightrope
Simply put. If the measures succeed, assetmarkets will continue to rise. Once assetprices brings relief to the balancesheets, the creditplug becomes unstuck.
Once the credit plug becomes unstuck, monetary policy will have to become tight in order to dampen inflation. This will drag assetmarkets lower. Stagflation will become a problem to be solved. In past history, stagflationenvironments have been fought by tight monetary policy and lax fiscal ditto. Consumers purchasingpower will suffer heavily and governments tax revenues ditto.
If the measures do not succeed and economies roll back into recession, there will not be much ammo left to utilise. Then bad assets/debt will come back to bite hard, plunging equities below the 2008 November lows.
Right now we are in a sweet (temporary) spot. Very good balance will be required from here. The probability for success is very much dependent on emerging markets growth.
Markets, Corporates and households are currently trying to utilise (whenever available) as much credit as they can for investments, production, exports and consumption. Investors might join the rally, but I suggest they should be wary of believing the story. Currently, the consensusview is that we have seen the bottom.
* New positions and positionchanges
- Bought NCC stock, the realestatebuilder
- Took profit on my short Usd/Jpy spot
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.
11 September 2009
The bearmarket rally is clearly not over. Assetpumping to fill the creditgap. Weaker Usd. Stronger Jpy.
* Quick feet. The Usd funding currency is being utilised to the max. Jpy just one of many.
The Usd bullishness has evaporated. Low rates are set to remain low amongst G20 countries for the foreseeable future. With creditmarkets still malfunctioning, this is yet another (quite risky) way of getting credit flowing again. Rising assetprices will eventually have that effect.
Enjoy the ride. This is one giant misallocation that businesses and households will take advantage of. Performing the massive missallocation process. Corporates and households with the best riskmanagement strategies will still be standing once the credittightening starts.
*Latam flows are accelerating, weighing on the Usd.
As Em flows are accelerating, this will be weighing on the "soon to be new global funding currency No1", the Usd. Assetinvestors should be quite pleased as it will spur commodities and equities further.
* The Chinese situation
The PM has made it clear that the fiscal and monetary accomodation will remain in place for the foreseeable future due to the vulnerability of the current economic rebound. Meanwhile, Chinese banks continue to lend. However,the fundamental trade flows remain in dire straits, with exports lagging. Since Chinese exports, in contrast to European ones, never got steroids injected via state supported export finance, the Chinese export numbers are likely more reliable than the European ones. This indicates a still quite gloomy global trade picture.
*How long will "happy days" last?
Tough call of course. As long as Centralbanks offer quantitative easing or economies fall back into recession. In the end I guess the Emerging markets will have to step up to the plate and deliver superior growth soonish. If they cant, who should then finance these funny money?
As inflated assetmarkets finally reaches the level where assetrelief becomes great enough to ease the strain on financial institutions balancesheets, the ensuing unplugging of the creditplug will start the tightening process. Then assetprices will suffer. More on that at another time.
For now, assetbuyers should love this environment with equities and bondmarkets rallying simultaneously.
As long as the creditplug remains, equities will rally. Whether the unplugging or the fallback into recession comes first we will see, but either way, it should at least be a couple of months before we know. Meanwhile, the pumping may continue.
* New positions and position changes
- Took profit on my long Eur/Nok spot position
- Took profit on my long Eur/Sek spot position
- Sold Usd/Jpy spot
As usual, good luck
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 Usd bullishness has evaporated. Low rates are set to remain low amongst G20 countries for the foreseeable future. With creditmarkets still malfunctioning, this is yet another (quite risky) way of getting credit flowing again. Rising assetprices will eventually have that effect.
Enjoy the ride. This is one giant misallocation that businesses and households will take advantage of. Performing the massive missallocation process. Corporates and households with the best riskmanagement strategies will still be standing once the credittightening starts.
*Latam flows are accelerating, weighing on the Usd.
As Em flows are accelerating, this will be weighing on the "soon to be new global funding currency No1", the Usd. Assetinvestors should be quite pleased as it will spur commodities and equities further.
* The Chinese situation
The PM has made it clear that the fiscal and monetary accomodation will remain in place for the foreseeable future due to the vulnerability of the current economic rebound. Meanwhile, Chinese banks continue to lend. However,the fundamental trade flows remain in dire straits, with exports lagging. Since Chinese exports, in contrast to European ones, never got steroids injected via state supported export finance, the Chinese export numbers are likely more reliable than the European ones. This indicates a still quite gloomy global trade picture.
*How long will "happy days" last?
Tough call of course. As long as Centralbanks offer quantitative easing or economies fall back into recession. In the end I guess the Emerging markets will have to step up to the plate and deliver superior growth soonish. If they cant, who should then finance these funny money?
As inflated assetmarkets finally reaches the level where assetrelief becomes great enough to ease the strain on financial institutions balancesheets, the ensuing unplugging of the creditplug will start the tightening process. Then assetprices will suffer. More on that at another time.
For now, assetbuyers should love this environment with equities and bondmarkets rallying simultaneously.
As long as the creditplug remains, equities will rally. Whether the unplugging or the fallback into recession comes first we will see, but either way, it should at least be a couple of months before we know. Meanwhile, the pumping may continue.
* New positions and position changes
- Took profit on my long Eur/Nok spot position
- Took profit on my long Eur/Sek spot position
- Sold Usd/Jpy spot
As usual, good luck
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.
10 September 2009
Post G20; Policymakers sliding further into bubble pumping?
* Post the G20 meeting "happy days" sentiment has expanded
The Usd is weaker, even triggering the upper 1.4450 barrier of the Chinese originated Double No Touch in Eur/Usd earlier in the week. I was positioned for a stronger Usd, weaker commodity currencies (Aud) and financial currencies (Gbp)via options and the timing for this was clearly wrong.
Although the financials in equitymarket have remained subdued post the G20 meeting, the current sentiment has remained focused on the almost global centralbank commitment to keep the quantitative easing programme in place til a recovery is secured. Criteria for an exit being an improving credit multiplier effects as well as lower unemployment.
Unfortunately, I wouldnt hold my breath on those variables improving drastically any time soon.
*Policymakers still with guns blazing, but the ammo is running out
Unorthodox measures still rules as conventional policy tools have been exhausted.
With near zero interestrates and creditmarkets not able to function properly, assetmarkets are left to fill the void.
Assetmarkets are used by policymakers to provide monetary stimulus via frontloading the assetmarketrally, generating financial market optimism and increased riskappetite globally.
This in turn is generating asset and balancesheet relief to banks and corporates.
*Now, what about sustainability (trendy environmentrelated word these days) in the financial context?
Well, the bubble could theoretically last long enough to bring along yet another burst of growth, but the risks will also grow exponentially. Especially as the misallocation factor into assets at this stage of the cycle risks becoming very high.
However it will become increasingly diffult to maintain the current rosy outlook given the optimistic scenarios that are currently priced into the assetmarkets. Currently, negative news regarding the current creditsituation is transformed into positive news via expectations of further stimulus measures.
While the markets might very well be correct in the assumption that policymakers are caught with their backs against the wall, this is likely not something to build long term bullish scenarios on.
I believe this situation is unsustainable regarding the pricing of the market. The G20 related positive impact from the promise of extended quantitative easing is likely to wane going forward.
*Be wary of commodity currencypositioning
Barring the extreme positioning of the carry trade boom in 2007, the CFTC data shows commodity currencypositioning is the highest for at least six years. Hence, ignoring negative news due to the extension of the QE programmes should become incresingly difficult.
*Positions and positionchanges
- Bought Eur/Usd spot
- Bought Gbp/Usd spot
- Bought Gbp/Jpy spot
- Bought Aud/Usd spot
- Bought Aud/Jpy spot
- Bought Eur/Sek spot
- Bought Eur/Nok spot
Eur/Sek and Eur/Nok are short term spot positions
The rest are deltapositions related to my long (fading) gamma
Near term I will focus on gamma trading.
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.
The Usd is weaker, even triggering the upper 1.4450 barrier of the Chinese originated Double No Touch in Eur/Usd earlier in the week. I was positioned for a stronger Usd, weaker commodity currencies (Aud) and financial currencies (Gbp)via options and the timing for this was clearly wrong.
Although the financials in equitymarket have remained subdued post the G20 meeting, the current sentiment has remained focused on the almost global centralbank commitment to keep the quantitative easing programme in place til a recovery is secured. Criteria for an exit being an improving credit multiplier effects as well as lower unemployment.
Unfortunately, I wouldnt hold my breath on those variables improving drastically any time soon.
*Policymakers still with guns blazing, but the ammo is running out
Unorthodox measures still rules as conventional policy tools have been exhausted.
With near zero interestrates and creditmarkets not able to function properly, assetmarkets are left to fill the void.
Assetmarkets are used by policymakers to provide monetary stimulus via frontloading the assetmarketrally, generating financial market optimism and increased riskappetite globally.
This in turn is generating asset and balancesheet relief to banks and corporates.
*Now, what about sustainability (trendy environmentrelated word these days) in the financial context?
Well, the bubble could theoretically last long enough to bring along yet another burst of growth, but the risks will also grow exponentially. Especially as the misallocation factor into assets at this stage of the cycle risks becoming very high.
However it will become increasingly diffult to maintain the current rosy outlook given the optimistic scenarios that are currently priced into the assetmarkets. Currently, negative news regarding the current creditsituation is transformed into positive news via expectations of further stimulus measures.
While the markets might very well be correct in the assumption that policymakers are caught with their backs against the wall, this is likely not something to build long term bullish scenarios on.
I believe this situation is unsustainable regarding the pricing of the market. The G20 related positive impact from the promise of extended quantitative easing is likely to wane going forward.
*Be wary of commodity currencypositioning
Barring the extreme positioning of the carry trade boom in 2007, the CFTC data shows commodity currencypositioning is the highest for at least six years. Hence, ignoring negative news due to the extension of the QE programmes should become incresingly difficult.
*Positions and positionchanges
- Bought Eur/Usd spot
- Bought Gbp/Usd spot
- Bought Gbp/Jpy spot
- Bought Aud/Usd spot
- Bought Aud/Jpy spot
- Bought Eur/Sek spot
- Bought Eur/Nok spot
Eur/Sek and Eur/Nok are short term spot positions
The rest are deltapositions related to my long (fading) gamma
Near term I will focus on gamma trading.
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.
07 September 2009
Time to sell commodities ex Gold, China bubble demand about to deflate. Financials should be weighed on.
* Barring the European regulation consensus, G20 left a cozy feeling which markets will enjoy today.
However, the financial regulatory aspect will not be something European shareholders of financials should enjoy that much. In fact, this should weigh on European financials for now. Better then, to shift to gold related stocks.
* New positions and position changes
None
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.
However, the financial regulatory aspect will not be something European shareholders of financials should enjoy that much. In fact, this should weigh on European financials for now. Better then, to shift to gold related stocks.
* New positions and position changes
None
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.
02 September 2009
The fresh liquidity has stopped coming in. China to become a drag, not a boost. The bearmarket rally is over.
* Good news is being brushed off by the markets. Sentiment is turning.
Positive German data is getting brushed off. The market is increasingly focusing on finding negative pieces in the news.
* Chinas August credit supply has slowed down to CNY 250BN, equivalent of a decline by more than 60% compared to H1.
The commodity price correction seems to have to go further down since inventories are still at too high levels. Another argument for lower commodity prices is the very large speculative part in the commodity related financial instruments.
Higher inflation expectations has often been used as the incentive for this trade, but as the global output gap becomes evident, these trades will have to be reduced, generating increased volatility and violent stoploss related moves as speculative interests clears the deck.
On top of it, the market is long commodity currencies, short Jpy, short Usd,,,,,, go figure.
I am long Aud/Usd puts, Aud/Jpy puts, long Usd/Cad calls.
* The G20 is starting, with calls for regulation of renumeration - heavy for financials
Yet a reason to be short banks. The still lingering monster fundamental bad loans and asset issue aside, this is really bad news for banks, should it go through. France, Germany and likely UK seems to be running with this ball. If decided, the US might pay attention.
The aim for politicians will be to control the riskprofile of the financial industry. If they can control the renumeration, they can control incentives and hence the riskprofile of the financial industry. This will obviously have repercussions for the financing of any business model based on high leverage funding from commercialbanks. Expect lower earnings for longer as well as higher creditlosses for the financial industry. The insurance industry will also get a much harder time.
Shareholders will balk at this idea as earningsgeneration will become much reduced due to lower leverage. This will be visible especially in times of low volatility.
I am short banks via SEB puts.
I am short US banks via long ETF SKF Calls.
*Australia heading south - China being the marker.
Australian Q2 GDP came in at 0.6% vs 0.2% expected, way better than expected.
This generated a small bounce in the Aud/Usd, however, Australian data will not be the driver for the Aud here. China will. Further, theres market speculation re an early rate hike in Australia, but same thing there. Chinese developments will determine this, hence, I expect no Australian rate hike, it could actually become a cut! Australian domestic data is not the driver for Australias monetary policy for the time being.
This is not only the case for Australia. It will become applicable to most China dependent commodities, currencies and equities.
* New positions and position changes
-Took profit on my long Eur/Sek
-Took profit on my long Eur/Nok
-Took profit on my long Eur/Huf
- Bought Usd/Cad call
- Added to my long Gbp/Jpy put
- Added to my long Gbp/Usd put
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.
Positive German data is getting brushed off. The market is increasingly focusing on finding negative pieces in the news.
* Chinas August credit supply has slowed down to CNY 250BN, equivalent of a decline by more than 60% compared to H1.
The commodity price correction seems to have to go further down since inventories are still at too high levels. Another argument for lower commodity prices is the very large speculative part in the commodity related financial instruments.
Higher inflation expectations has often been used as the incentive for this trade, but as the global output gap becomes evident, these trades will have to be reduced, generating increased volatility and violent stoploss related moves as speculative interests clears the deck.
On top of it, the market is long commodity currencies, short Jpy, short Usd,,,,,, go figure.
I am long Aud/Usd puts, Aud/Jpy puts, long Usd/Cad calls.
* The G20 is starting, with calls for regulation of renumeration - heavy for financials
Yet a reason to be short banks. The still lingering monster fundamental bad loans and asset issue aside, this is really bad news for banks, should it go through. France, Germany and likely UK seems to be running with this ball. If decided, the US might pay attention.
The aim for politicians will be to control the riskprofile of the financial industry. If they can control the renumeration, they can control incentives and hence the riskprofile of the financial industry. This will obviously have repercussions for the financing of any business model based on high leverage funding from commercialbanks. Expect lower earnings for longer as well as higher creditlosses for the financial industry. The insurance industry will also get a much harder time.
Shareholders will balk at this idea as earningsgeneration will become much reduced due to lower leverage. This will be visible especially in times of low volatility.
I am short banks via SEB puts.
I am short US banks via long ETF SKF Calls.
*Australia heading south - China being the marker.
Australian Q2 GDP came in at 0.6% vs 0.2% expected, way better than expected.
This generated a small bounce in the Aud/Usd, however, Australian data will not be the driver for the Aud here. China will. Further, theres market speculation re an early rate hike in Australia, but same thing there. Chinese developments will determine this, hence, I expect no Australian rate hike, it could actually become a cut! Australian domestic data is not the driver for Australias monetary policy for the time being.
This is not only the case for Australia. It will become applicable to most China dependent commodities, currencies and equities.
* New positions and position changes
-Took profit on my long Eur/Sek
-Took profit on my long Eur/Nok
-Took profit on my long Eur/Huf
- Bought Usd/Cad call
- Added to my long Gbp/Jpy put
- Added to my long Gbp/Usd put
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.
01 September 2009
Declining Chinese credit supply to drag Shanghai, commodities lower
*Brent Oil seems to be heading lower, commodity currencies should suffer as well.
This could put the natural gas - oil spread in play, buying natural gas, selling oil. Physical raw material demand is slowing, (Dry Freight Index, gas prices) speculative positions should be at risk.
* US bond yields remain offered, despite strong incoming data. Reason? Official accounts are putting cash back into the yield curve.
* Jpy volatility set to increase.
With the change of the Japanese government, leading to a less interventionist driven MOF/BOJ, there is some talk that the "Usd/Jpy put", will dissappear. Underlying Jpy strength should remain a theme. With heavy positioning on the other side from leveraged accounts as well as Japanese retail, watch out (or profit) from a swift increase in volatility as these accounts try to push the market but run the risk of getting stopped out in a violent fashion.
The main reason being a refocusing towards domestic demand from export demand. In essence a shift from Corporates towards households.
* Position and position changes
-Closed my long Usd/Chf
- Closed my long SAS Airline stock
- Opened long Eur/Huf
- Opened long Eur/Sek
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.
This could put the natural gas - oil spread in play, buying natural gas, selling oil. Physical raw material demand is slowing, (Dry Freight Index, gas prices) speculative positions should be at risk.
* US bond yields remain offered, despite strong incoming data. Reason? Official accounts are putting cash back into the yield curve.
* Jpy volatility set to increase.
With the change of the Japanese government, leading to a less interventionist driven MOF/BOJ, there is some talk that the "Usd/Jpy put", will dissappear. Underlying Jpy strength should remain a theme. With heavy positioning on the other side from leveraged accounts as well as Japanese retail, watch out (or profit) from a swift increase in volatility as these accounts try to push the market but run the risk of getting stopped out in a violent fashion.
The main reason being a refocusing towards domestic demand from export demand. In essence a shift from Corporates towards households.
* Position and position changes
-Closed my long Usd/Chf
- Closed my long SAS Airline stock
- Opened long Eur/Huf
- Opened long Eur/Sek
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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