by Ashraf Laidi | May 16, 2013 2:20
Telling the FT's Investment Editor John Authers why the USDJPY is particularly powerful and could extend to 108. Never since the USD was freely floated has USDJPY rallied for 8 consecutive months. Aside from some historical technical points, the choice of the Bank of Japan governor, the disinflationary tendency of the world economy and the positioning of the Federal Reserve are among the key forces underpinning the rally ahead.
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by Ashraf Laidi | May 13, 2013 17:23
93% of shares in the ?&?500 are trading above their 200-day moving averages a level not seen since May 2011. The indicator (200-DMA participation) gives an idea on the internal strength of the underlying index, by highlighting the degree of participation of individual shares in the current rally. In addition, the S&P500 went 49 weeks without falling more than 10%, which is the longest since the 60 weeks elapsing between March 2009 and April 2010.
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by Ashraf Laidi | May 4, 2013 17:07
- The prospects of negative ECB rates
- Novtony's remarks highlighted by Austrian banks' situation
- On the Hedgehog-Fox analogy regarding Bernanke-Draghi
- Macro-Market Divergence
- Outlook for Equities
- Views on EURUSD and USDJPY
by Ashraf Laidi | May 1, 2013 15:39
The contrast between stable market metrics and recession-stuck Eurozone offers little choice to the ECB but to opt for the rate cut route instead of the LTRO alternative. A 25-bp cut may be insignificant, but failure to cut would disappoint 80% of market participants expecting a rate cut, which may trigger a fresh euro rally to the detriment of the already struggling Eurozone, including a recession-bound Germany.
A Draghi rate cut would be more tactical than macroeconomic.
That is especially the case considering the FOMC will most likely downgrade its economic view and put to rest all speculation of tapering QE before year-end. A dovish Fed on Wednesday will have to be followed by a dovish ECB on Thursday.
by Ashraf Laidi | Apr 30, 2013 17:38
ECB's Draghi is now forced by the market to go on with the much anticipated rate cut --even if it it has little macroeconimic effect. Leaving rates unchanged would prop the euro higher, especially as the FOMC will likely downgrade its economic view on Wednesday and dampen expectations of any eearly reduction of QE.
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by Ashraf Laidi | Apr 18, 2013 18:36
Ashraf tells CNBC Arabia about the losses in gold and the $560 bn in losses to central bank reserves. Fears of margin hikes in China, chatter that Italy (4th largest owner of gold) may start selling reserves; Fed selling GLD naked shorts in order to rebalance the 50-1 ratio of Buyers-Sellers of bullion; and violent unwinding of the short yen/long risk assets trade leading to gold liquidation. Last week we warned about the sharp drop in the Gold/S&P500 ratio, which today has reached a 5-year low. The big question now emerges as to where gold will go. 1350 has proven to be the 30% peak to trough decline, referred to in previous webinars and to our Premium subscribers. The recent bounce may lift gold towards 1400s but so far the indications suggest gold will revisit 1350s and may have the dynamics to extend further down to 1290s. Our bearish stance of the past 3 months has been mainly backed by multi-time frame momentum measures, which we converted into recommendations for our Premium subscribers with varying success due to miscalculation of stops. More importantly, trading rationales were accompanied with each trade and shift in bias. There are also important developments in the Gold/Silver ratio and the extent to which silver may add to its losses.http://ashraflaidi.com/premium/trades
by Ashraf Laidi | Apr 15, 2013 14:23
Gold selloff turns to a free fall on reports of margin calls hitting buyers at the Shanghai Gold Exchange. China's weaker than expected GDP figures coming in at 7.7% from 7.9% did not help metals either. Fears that nations other than Cyprus will resort to gold selling to bolster their finances are hurting the metal. Silver extends collapse to 23. Both gold and silver are seeing a Monday rebound, which many conclude to be bottom fishing by the central banks. To find out, which of the 2 metals faces more downside, take a look at our note on the Gold/Silver Ratio in the latest Premium note. New trades are issued on GOLD, SILVER and USDCAD with accompanying trading notes to lay out the rationale for these trades.http://ashraflaidi.com/premium
by Ashraf Laidi | Apr 9, 2013 15:28
Ashraf tells CNBC Arabia about the 5th consecutive daily rise in EURUSD—the longest series of advances since December as the balance of risks in FX shift from waning event risk in Eurozone to question markets about US growth. One key source of volatility is Wednesday's release of the FOMC minutes. Each of the last 3 FOMC minutes led to a rallying USD and tumbling gold. Selling USD bounces is part of the strategy, while 1.3150s is the anticipated cap in EURUSD. In our latest Premium Insights, we issued 3 new trades in EURUSD last night (Monday), 2 of which are currently in progress.
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by Ashraf Laidi | Apr 3, 2013 15:33
Telling CNBC Arabia that yen traders await Thursday's BoJ decision, which will be scrutinized for whether governor Kuroda succeeds in producing a majority vote in favour of an increase in the amount of assets buys and extending the duration of bonds under the asset purchases program (APP to five years or longer, from the current three years.
There is also the contentious "bank note rule", which stipulates that total asset purchases by the central bank may not exceed total bank notes in circulation so as to avoid monetizing of the debt.
The worst from Cyprus is gone as long as there are no signs that haircuts on deposits spread to other Eurozone nations.
Both ADP and services ISM were a disappointment, which is leading to fresh yen strength vs USD.
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by Ashraf Laidi | Mar 25, 2013 16:14