Intraday Market Thoughts

FX Shrugs, Indices Shaken

by Adam Button
Sep 18, 2020 18:53

Risk aversion syrokes again. Whether it's the surge in Covid19 cases in the US, France, or lockdowns in part of the UK-- or it's the US decision to block China's WeChat and TikTok, selloff in indices is rife, especially as quadruple witching hour triggers the VIX back off its 55-DMA. Premium members who are part of the WhatsApp Broadcast group had a series of trades this week on NASDAQ, DAX, DOW, GBPUSD and EURGBP.وتفضلوا ببعض مستدجدت نصائح. اشرف العايدي لاعضاء مجموعة الواتساب في الصورة ادانه بالعربي تحت الصورة بالإنجليزي 

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FX Shrugs, Indices Shaken - Whatsapp English Sep 18 2020 (Chart 1)

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FX Shrugs, Indices Shaken - Whatsapp Arabic Sep 18 2020 (Chart 2)

The strikes against the US dollar are adding up. Thursday's risk aversion produced a dollar bid for a time but it faded in fairly short order, even against commodity and emerging market currencies. It begs the question: If the dollar can't rally on a day like that, when can it rally?

The economic data was mixed once again. Initial jobless claims were a touch higher than estimates while continuing and PUA claims were better. Housing starts fell 5.1% in a rare miss on the red hot real estate market while the Philly Fed was bang-on expectations at +15.0.

Data has been more up-and-down in the past few weeks after months of consistently beating expectations. That run of data sent the Citi economic surprise index to the highest ever but – notably – even with that the dollar has struggled since March. We may now be seeing what happens when economists (and markets) finally get a handle on the direction of the economy.



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