JLS Trade: Long and Short USDCAD, NZDUSD, AUDUSD and EURUSD
The EURUSD on hold at 1.1200 as expected and the CHF and JPY carrying and re-carrying the USD, CAD, NZD, AUD, EUR (GBP will be carried later). By interest rate differentials, the USDCAD to upward ceiling and the NZDUSD, AUDUSD, GBPUSD and EURUSD to downward ceilings, however the current carrying and re-carrying to hold those pairs to be fluctuated interior their lower states of their medium term target zones. This results the opportunity to long and to short those pairs interior their current zones.
Long and short of those pairs interior their current zones (hedging trading) could be profitable by holding the long to the upper levels and to hold the short to the lower levels of their "interdays" or weekly and monthly levels. However, those pairs will not break their upper ceilings and lower ceilings for USDCAD.
I long and short on USDCAD, NZDUSD, AUDUSD, EURUSD and GBPUSD for capital accumulation.
The LONG on JPY-pegged pairs, the SHORT on EUR-pegged pairs and the SHORT and LONG on major pairs (excluding USDJPY and USDCHF) result the portfolios to be "mutually hedged and re-hedged" by their volatility "interior their target zones" to allow the trading operation to be managed at "highly leverage ratios" up to 80x to look for higher return (in commercial operation).
Long and short of those pairs interior their current zones (hedging trading) could be profitable by holding the long to the upper levels and to hold the short to the lower levels of their "interdays" or weekly and monthly levels. However, those pairs will not break their upper ceilings and lower ceilings for USDCAD.
I long and short on USDCAD, NZDUSD, AUDUSD, EURUSD and GBPUSD for capital accumulation.
The LONG on JPY-pegged pairs, the SHORT on EUR-pegged pairs and the SHORT and LONG on major pairs (excluding USDJPY and USDCHF) result the portfolios to be "mutually hedged and re-hedged" by their volatility "interior their target zones" to allow the trading operation to be managed at "highly leverage ratios" up to 80x to look for higher return (in commercial operation).
Comment:
Economic activity is seen expanding at a solid pace, albeit somewhat slower than in 2018, and the job market is expected to remain strong. Recent declines in energy prices will likely push headline inflation further below the FOMC longer-run goal of 2% for a time, Fed Chair Powell said in his Semiannual Monetary Policy Report to the Congress. Fed Chair added that over the past few months some crosscurrents and conflicting signals were observed. Financial markets became more volatile and financial conditions are now less supportive of growth. Growth has slowed in some major foreign economies, particularly China and Europe. And uncertainty is elevated around several unresolved government policy issues, including Brexit and ongoing trade negotiations. The Fed held the target range for the federal funds rate at 2.25-2.5% on January 30th 2019.
Comment:
Fed Policymakers Unsure on Future Rate Hikes: Minutes
Many Fed officials suggested that it was not yet clear what adjustments to the target range for the federal funds rate may be appropriate later this year, minutes of the January meeting showed. Policymakers also noted that some risks to the downside had increased and pledged to end reductions to its balance sheet before the end of 2019.
Almost all participants thought that it would be desirable to announce before too long a plan to stop reducing the Federal Reserve's asset holdings later this year.
Participants noted that some risks to the downside had increased, including the possibilities of a sharper-than-expected slowdown in global economic growth, particularly in China and Europe, a rapid waning of fiscal policy stimulus, or a further tightening of financial market conditions. An increase in some foreign and domestic government policy uncertainties, including those associated with Brexit, an escalation in international trade policy tensions, and the potential for additional extended federal government shutdowns were also cited as downside risks.
Many participants suggested that it was not yet clear what adjustments to the target range for the federal funds rate may be appropriate later this year; several of these participants argued that rate increases might prove necessary only if inflation outcomes were higher than in their baseline outlook. Several other participants indicated that, if the economy evolved as they expected, they would view it as appropriate to raise the target range for the federal funds rate later this year.
Many Fed officials suggested that it was not yet clear what adjustments to the target range for the federal funds rate may be appropriate later this year, minutes of the January meeting showed. Policymakers also noted that some risks to the downside had increased and pledged to end reductions to its balance sheet before the end of 2019.
Almost all participants thought that it would be desirable to announce before too long a plan to stop reducing the Federal Reserve's asset holdings later this year.
Participants noted that some risks to the downside had increased, including the possibilities of a sharper-than-expected slowdown in global economic growth, particularly in China and Europe, a rapid waning of fiscal policy stimulus, or a further tightening of financial market conditions. An increase in some foreign and domestic government policy uncertainties, including those associated with Brexit, an escalation in international trade policy tensions, and the potential for additional extended federal government shutdowns were also cited as downside risks.
Many participants suggested that it was not yet clear what adjustments to the target range for the federal funds rate may be appropriate later this year; several of these participants argued that rate increases might prove necessary only if inflation outcomes were higher than in their baseline outlook. Several other participants indicated that, if the economy evolved as they expected, they would view it as appropriate to raise the target range for the federal funds rate later this year.
Comment:
JPY carry traders are pausing to wait central banks' refining policy and interest rate directional policy at current economic slowdown globally as provoked by the IMF and the global central banks. Global investors also refining their investment portfolios to assure profit booking for their shareholders' dividend.
No sign of unwinding by the carry traders yet, but pauses may take sometime before resuming to carry. This will result the resuming of major pairs to downward ( NZDUSD , AUDUSD , GBPUSD , EURUSD ) and to upward ( USDCAD ) as their interest rate differentials' price trends. However at mixed performance of price fluctuation.
GBP-pegged pairs could be in harmony on pressuring the positive interest rate differential pairs ( GBPCHF , GBPJPY and GBPEUR ) to downward (note EURGBP to upward) and supportive to pressure the negative interest rate differential pairs ( GBPUSD , GBPNZD , GBPAUD and GBPCAD ) to downward. Thus, at current market environment, the GBP-pairs in play.
No sign of unwinding by the carry traders yet, but pauses may take sometime before resuming to carry. This will result the resuming of major pairs to downward ( NZDUSD , AUDUSD , GBPUSD , EURUSD ) and to upward ( USDCAD ) as their interest rate differentials' price trends. However at mixed performance of price fluctuation.
GBP-pegged pairs could be in harmony on pressuring the positive interest rate differential pairs ( GBPCHF , GBPJPY and GBPEUR ) to downward (note EURGBP to upward) and supportive to pressure the negative interest rate differential pairs ( GBPUSD , GBPNZD , GBPAUD and GBPCAD ) to downward. Thus, at current market environment, the GBP-pairs in play.