Powell capitulating and surprising markets with a rate cut which helped euro crack the 1.12 handle. After a nice pullback we are right back to the starting point in time for the NY session. The drivers remain the same for now, (i) bearish on risk via virus impact, while (ii) bullish on risk via Sanders fading into the distance provides the pullbacks. The...
For risk markets, historic times with US10Y breaking through 1.00, the 50bp cut is really sends ⚠️ signals that things are not as healthy as they made out as ECB insist they have no room to follow the Fed. Buckle up and remain defensive guys, I am adding USDJPY shorts on the day with targets 106.9x and 106.5x below. Stops needed to be above 107.9x. For those...
Fed rate cuts taking full control of the FX board as virus disruptions start to fade - it's time to go shopping in G10 and EM FX and the intervention policies will provide some USD relief. Here looking for a rebound into previous ranges in USDRUB as a pro-cyclical currency. A test of the previous range we were trading looks around the corner: The spread of...
Risk markets are starting to form a temporary floor via BOJ stepping in and suture the wound. Volatility is set to remain high for the coming days, Asian stocks finding a bid from the usual dip buyers while USDJPY has started to bounce from last week’s move. Looking to sell any rallies into 109.2x as we have not seen the end of the storm in currencies yet. ...
The euro finding more demand overnight with Italy behaving and looking for help on the fiscal side. Risk markets are cooking a s/t rebound via co-ordinated global policy intervention; by no means is this the end of the virus but the underlying negative tone we have been witnessing across mainstream media is starting to soften this week. Global Central Bank...
On the risk side, US10Y bouncing from the lows while Global Equities attempt to form a s/t floor. Central Bank co-ordinated policy is only a matter of time, markets have forced FED, ECB, BOC, BOJ, BOE and everything in-between to kiss the hand and keep rate cuts on the table. JPY is itching to resume dancing the same rhythm but given USD demand via month end...
Here we go for another important NY session … EURUSD holding the 🔑 1.09xx test of resistance ahead of the open as expected. Markets notably anxious of further outbreaks which (sadly) seems unavoidable now. I spotted a lot of euro supply from corporates this morning. Remaining short is perfectly reasonable assuming the current highs hold this PM, targets are...
A very important weekend across the globe. Italy, Iran and SK weighing heavy on virus sentiment as capital rushes out the doors. Any hopes of a Q2 rebound are starting to fade and that USD haven demand we’ve seen of late looks set to continue. All eyes this week remain on virus watch, a muted/slightly dovish Lagarde expected on the wires and here happy to sell...
Here tracking 1.295x as the level to recycle and load more shorts. Well done those following from the original short-term swing which was triggered on the cabinet reshuffle (see diagram below). As widely expected GBP suffering as markets began to look towards the EU negotiations kickstarting in March. Both sides are very wide apart and no-deal Brexit looks set for...
Highlights of the week going to USDJPY exploding to the topside and catching many with their pants down (myself included). In times of extreme panic even the USD can outperform JPY as a safe haven currency. Japanese economy is coughing badly in all data fronts and considering the geographical location relative to the virus it makes it hard to find reasons to park...
As widely expected we got a test of the highs at 64.2x once the channel was broken (see diagram). The ladder is light and I like to play this tight range and look for a test of the lows. "Eyes here, looking to sell 64.2x on the day..." - This is currently in play, although risk is showing now signs of abating the low sizings are keeping a test of the lows on...
With US away from their desks today we will get a dull session and the relentless loonie bid will grind us back towards the 1.3275x area. It is a good value level to re-engage with shorts and here looking to add ahead shorts there ahead of local CPI on Wednesday. The MT and LT outlooks for Canada are very good in my books; A bullish USD view on risk via...
Here tracking for a very technical pullback after a test of last week's open. Positioning is incredible stretched meaning the tree can be shaken at any minute, I want to get long USDZAR but reluctant to chase anything at these levels. Tracking a pullback into the 14.7x jurisdictions before doing anymore business here. A similar move for those tracking USDTRY: ...
Models make it hard to add any longs to USDCHF here at the highs, risk opening the floodgates for a -1.5% short, mainly stemming from a notable pick up in demand for CHF after the latest shift in risk sentiment. Here tracking the risks related to coronavirus that imply the Eurozone growth will take another hit (as if things were not already difficult enough for...
All 👀 on EUR with heavy sells mounting from some of the biggest sharks in the business. It’s difficult to find anything positive on the macro side in Europe at the moment, and notably I am getting an increasing amount of questions from clients with the same exhaustion. With German uncertainty, ECB emergency cuts making the rounds and when you look at positioning...
The starting position has been difficult to reach for the 3rd impulsive wave after coronavirus risk-off flows hijacked the move. But what now? Either a breakdown to close the gap from French elections in 2017 or an imminent reversal to kickstart the leg; of course if only the positional obligation was not so appealing at these levels for longs because we are...
Turkey continues to stand out on the EM FX board, USDTRY finding strong support at the 5.97xx with sizeable USD demand signals from local Turkish banks. These same banks will be quick to cover should we breach the 6.00 handle and vulnerable to a squeeze once engaged. In the very immediate term EM FX will be hijacked by the ebb and flow of coronavirus...
An interesting addition to the Oil dynamics with OPEC cuts coming in March clashing with risk-off flows via coronavirus spillovers and everything else in-between. There is a lot going on; highly recommend tracking the retrace leg in Oil for this one it is really going to act as the main driver for us to lean on over the coming sessions. We can track accurately the...