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Results: 341 to 350 of 1,000
Results: 341 to 350 of 1,000
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Intraday Market Thought: FX to Join the Party?
by Adam Button | Nov 27, 2020 19:46
The moves in equity markets this month have been breathtaking, while FX is....The US dollar ended the week lower against all G10 currencies, with JPY as....Ashraf told us gold has never stopped falling at its 200-DMA...So how far does it go? see below...nbsp; NZD and AUD led, while GBP and CHF lagged ahead of JPY and USD...Ashraf has posted the Premium video below on his strategy to trade EURUSD....Take AUDJPY for instance—It's a classic 'risk appetite' trade....5% in the month...That would normally be a great month but considering that many equity indexes....A similar story is seen in other classic FX risk trades; some of that is yield....Yet, it's not difficult to imagine a scenario where risk currencies begin to....A number of yen crosses are threatening to break out and commodity prices have....Notably, oil rose to the highest since March, while USD/CAD broke below 1...30 with authority...nbsp;....Metals were in focus again today, falling back sharply, this time gold....If they give way easily then it's a sign of a dramatic reversal of sentiment....Ashraf reminds us that XAUUSD may drop by as much as 3%-5% below its 200-DMA....Whether this means 1745 or 1730 is in the works, remains to be seen...The other question is “how long the slow burn will last before any....nbsp; No real positives are expected before year-end...nbsp;....For ideas on how trade EURUSD into the rest of the year, take a look at the....nbsp;....nbsp;..
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Intraday Market Thought: Deal Talk Reveals Market Bias
by Adam Button | Dec 18, 2020 18:23
Negotiations are always the most-difficult at the end but we're now....US indices remain jittery following news of a an obstacle related to preserving....The US dollar slumped again on Thursday but is mounting a broad bounce on Friday...We're happy to announce that our WhatsAppBroadcastGroup members with....Samples from this week's messages are below...nbsp;....Boris Johnson and Ursula von der Leyen had a phone call on Thursday and the....Von der Leyen was first and her comments were more upbeat...She said they had made “substantial progress” in talks and....The market reaction to that was minimal, suggesting a near deal was already....A short time later, Johnson offered a different take saying it looked very....He said negotiations were now in a serious state...That kicked off a 50-pip decline in cable that was later helped along by a....Combined they show a market that was overstretched, at least in the short-....Does it mean that a deal is full priced in and that there's a risk of a sell-....At the same time there may be heavy real money flows back into Britain in the....nbsp;....In the US, all signs point to a stimulus deal on Friday or the weekend...A text of a deal is expected imminently and a vote could come as soon as the....Similarly to the Brexit deal, the market is now showing little reaction to....In the case of both Brexit and US stimulus, the signals in the market will....It's a dangerous time of year to trade at the best of times and that'..
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Intraday Market Thought: What’s the Yields Signal?
by Adam Button | Jan 26, 2021 18:12Another jumbled mess of a trading session in an exuberant but divergent....The dollar is off its lows of the day, but still down across the board...EURUSD is off its highs after the ECB said it's studying the causes behind....Ashraf posted the chart below, highlting similarities in DXY weakness alongside....Note how DXY bottomed in mid Q1 2018 (after a brief market selloff), while....nbsp;....Monday's 7-bp decline in US 10-year yields (from 1...10% to 1...03%) is considered a break below its 2-week range support, but keep an eye on....03%) and prior 1...0750% support as new resistance...Normally, that would signal risk aversion or declining economic prospects....The Fed is buying $120B in Treasuries and MBS per month while re-investing....One force driving down yields was yesterday's remarks from Senate....This lingering disappointing may also explain why indices are reluctant to....nbsp;....Any further decline in yields would be likely accelerate selling in USD/JPY and....The problem is that the opposite happened on Monday in what was a strange....Much of the broader discussion in markets is about bubbles and there are....Bonds might be giving us an early signal that it's all run too far...At the same time, bonds themselves will become the story on a fall back below 1%....That would signal more easy money for equities and we've little doubt that....In summary, it's a market without a real theme right now besides anticipation of....US stimulus talks have tried to fill the void but haven't been able to capture....nbsp;.. -
Intraday Market Thought: Yield Shield Peeled
by Adam Button | Feb 25, 2021 22:26
The broader market is struggling with weather to interpret rising yields as a....On Thursday, an ugly rise in rates (10 yr hit 1...60%) led to a big reversal in risk with CHF leading and AUD lagging...The US PCE report on Friday will add another big risk...Below are snippets of the past 2 days given by Ashraf to members of the....nbsp;....There is a good argument that rising yields reflect confidence in the economy....At the end of the day, US 5-year yields were up 22 basis points to 0...82% and US 10s had briefly hit 1...60%....On its own, 1...6% isn't anything akin to 'high rates' but at the start of the month....98%....They've moved too quickly for anyone's comfort and that message....5%....Initially the FX market shrugged off higher yields, early on Tuesday AUD/USD....After a strong US durable goods orders report, the Canadian dollar also hit a....But as the jump in yields grew increasingly disorderly, both reversed....Cable was also sucked back to 1...40...Importantly, this was a global jump in yields and while the outlook is strong....The Fed will be facing pressure internally and externally to clamp down....The first step will be verbal intervention...The Fed's Williams speaks Monday, Brainard on Tuesday and Powell next....Yet, if Friday's PCE report shows unwelcome inflation, they may be forced....The consensus estimates on both core and headline are +1...4%....As Ashraf hraf has pointed out in Monday's video (direct open link here), he..
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Intraday Market Thought: Dollar in Demand, Best in 8 Months
by Adam Button | Mar 26, 2021 16:55
The US dollar continues to strengthen and that leaves us with an opportunity....DXY is having its best month since July 2020...The US week wrapped with softer than expected core PCE price index at 1...4% y/y vs exp and prev 1...5%....Below are 2 charts: First is the extended analog with 2018 that deserves....The second chart is that of the latest progress in USDJPY, where it was when we....nbsp; ....US 10-year yields made a big move higher on February 16 to break above the....20%....That kicked off a round of risk aversion that continued this week...The second-worst performing currency in that period is the New Zealand dollar,....However the worst performer is the Swiss franc, which is a traditional safe....What's happening?....It's all about carry...Pledges from the Fed to keep ultra-low rates had made the US dollar into a....At the same time, the eurozone is struggling to roll out the covid vaccine....There are plenty of cross-currents but there is a clear unwind in USD-funded....That also helps to explain how CAD is the only currency to outpace USD...Canadian bonds have narrowly traded alongside their US counterpart and as....Another factor that's boosting the US dollar is positioning...Short-USD was one of the most-crowded trades coming into the year...nbsp; As the dollar index climbs to the highest since November, that trade will....What could kick the dollar into overdrive is a shift in Fed....For now, the chorus about seeing through transitory inflation is a huge hurdle....nbsp; We also do not think the chapter of oil selloff is over...nbsp;..
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Intraday Market Thought: Slow Motion Tantrum & VVIX
by Adam Button | Jul 8, 2021 13:12
Equities dip in a broader bout of risk-off on a combination of travel....The relentless bid in bonds continued on Wednesday as the paradigm of bond and....CHF and JPY are the strongest, followed by EUR, while NZD and AUD are at the....US initial jobless claims came in higher than expected (373K vs exp 350K)....Ashraf kept reiterating the message to the WhatsApp Broadcast Group Members:....The long USDJPY trade did not work out well, but it was later compensated with....This risk-off is not stopping soon...This VVIX/VIX chart was shared with our the Group earlier...For an explanation on how to use/read the VVIX/VIX, please see this video...Convincing explanations for falling yields remain elusive with technical....One factor that can't be ignored is the Fed...The drop in yields accelerated after the June 16 FOMC and that's not a....The kneejerk reaction was to push yields higher on a taper but the message now....That they could taper/hike as growth slows and temporary inflation recedes...The FOMC minutes underscored the delicate balance...They said a 'substantial majority' of participants judged that....In a sense, this could be a different kind of taper tantrum...Technically, there isn't much support until 1...23%, where the 200-day moving average currently resides...Where it gets interesting is the reflexivity embedded in the Fed...They cheered rising yields earlier in the year and will be cognizant that....Beyond that, there's a conundrum that Fed and other central bank buying....Ultimately though, the only way forward is to watch for headlines, economic data....July signals are often hazy so we have no expectation that this puzzle will be....nbsp;..
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Intraday Market Thought: Macklem vs Powell vs Orr
by Adam Button | Jul 14, 2021 14:17Overnight, the RBNZ signalled it will end QE (fully tapers) this month...Moments ago, Powell's prepared speech indicated inflation is well below....Yesterday, a Fed official brushed off a high CPI print but after a weak bond....The US dollar is down across the board ,with the kiwi leading the pack...The Bank of Canada decision is at 2 pm GMT, followed by Macklem's speech 1....Ashrafs suggested for the WhatsApp Broadcast Group a 2-pronged trade on CAD....US June CPI rose 5...4% compared to 4...9% y/y expected in the largest rise since 2008...Core and monthly numbers were similarly strong and the initial reaction in the....As the minutes ticked by though, the dollar strength began to fade...Part of that was market participants picking apart the report...The jump in used car prices is undoubtedly transitory...They rose another 10% in June for a 45% y/y increase – a shocking number....There were other quirks too, including energy and some durable goods...In all, 6 items accounted for 55% of the increase in June...As that was digested, the US dollar gave back its gains, even completing the....There are lingering concerns though...Rent inflation has risen in consecutive months in what could be a long-term....The dollar got a second lift on a 30-year bond auction...The yield at 2...000% was much higher than 1...976% expected and that triggered a second rally in the dollar and a....05%....The price action looks a bit like bonds reversing the recent gains or pricing in....As yields ticked up, stocks also ticked lower...In the day ahead, we will get the BOC decision and Powell testimony...For the BOC, a taper is in the cards and a strong consensus has emerged around....Also keep a close eye on forecasts as inflation is likely to move higher and....That's because recent lockdowns didn't weight on growth as much as expected and....For Powell, the main message of transitory inflation is unlikely to....On Tuesday, SF Fed President Daly offered an early hint at a taper....That fits with market expectations but a reiteration from Powell would firm up.. -
Intraday Market Thought: We're a ways away
by Adam Button | Jul 29, 2021 12:54
quot;I think we're a ways away from having had substantial further progress....This was the most decisive sentence from yesterday's Fed press....nbsp; As soon as Ashraf read this phrase, he immediately alerted the....Powell and the FOMC shifted communication to signal that they're....The US dollar initially jumped on the Fed decision (because of removing "....Yesterday's pre-FOMC Premium trade is already +70 pips in the green...nbsp;The first look at Q2 US GDP is up next...nbsp;....The first surprise came in the FOMC statement when the text was changed to....This was to reflect that that the US economy is closer to the '....Powell underscored that in the statement by saying there was still 'some....nbsp; He later repeated that same line, indicating it was planned...It's also a departure from two weeks earlier when he said they were '....Powell also twice deferred to the committee regarding inflation and risks....That suggests there's disagreement on whether or not price rises will prove....Expect plenty of commentary along those lines in weeks ahead from the hawks and....In terms of the market, the initial shift in communication boosted the....The thinking there may be that while a taper is inching closer, there's no....We will be carefully watching for any shift as the implications are digested...Looking ahead, the advance look at Q2 GDP is up at 1230 GMT on Thursday....The consensus for GDP is an annualized pace of 8...6%, reflecting the reopening...Indications on business investment and inventories will be the place to watch...This week the IMF stretched out the timeline for the US recovery on some of....Ultimately that may be good news as it will keep the Fed from rapidly..
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Intraday Market Thought: Kabul Fills Jackson Hole
by Adam Button | Aug 26, 2021 20:18
The ink was barely dry on the rising yields narrative before news of two....As Ashraf indicated, geopolitical risks weigh on markets when US interests....The last time this happened was in January 2020 when US soldiers were....The US dollar is stronger against all currencies, with the yen the least weak....US initial jobless claims edged up while the 2nd reading of Q2 GDP edged lower...We should also mention how US yields initially shot up as a result of hawkish....nbsp;A new FX trade was issued to Premium members...nbsp;....Markets were settled into a bit of a lull ahead of Powell's Jackson Hole....The main themes of equity strength and yen weakness continued Wednesday but....A larger change was in the sovereign bond market where yields rose the most....There's no clear catalyst but we're reminded of the June/early-July drop....It later turned out that the bond market was dialed into what was coming with....Is there a new signal brewing? It's far too early to say...US 10-year yields rose 4 basis points to 1...34%, which is only back to August 13 levels and far from 1...60% pre-delta...The obvious catalyst for higher rates is the better sentiment on delta, but it....Technically, there's reason to expect the move to extend...The double bottom at 1...12% in July/August hasn't been tested with lows near 1...23% last week despite the jitters...A climb above the August high of 1...38% would add to the case for higher rates and, by extension, higher USD/JPY...Nonetheless, US 10 yr yields must first cross above the 55-DMA of 1...34%....In Asia-Pacific trading there was another hint from the Bank of Korea, who....75%....Economists were split on the move ahead of time but rising consumer debt, a hot....Officials had been signaling a rate hike since May but that was delayed by a....Could that be a hint about what's coming from the Fed?..
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Intraday Market Thought: FOMC Consistent with Jackson Hole
by Adam Button | Sep 23, 2021 13:52
The FOMC upped its hawkish message on Wednesday, but the market reaction was....There is an explanation in the final paragraph on why FX held and indices....nbsp; GBP is up after the BoE showed more optimism in its statement/....nbsp;The Canadian dollar is the top performer while the yen lagged on the....Canadian retail sales fell by less than expected and US jobless claims edged up....A new Premium FX trade was issued ahead of yesterday's FOMC statement...Below is some of our analysis on the Fed's new dot plot, Powell's....nbsp;....nbsp;....Wednesday's risk tone grew more positive after Evergrade said it would....A report in AsiaMarkets also said that a bailout is coming...Finally, comments from the RBA's Debelle along with Powell hinted at a....Understandably, some market participants may not have wanted to react to the....The FOMC statement itself was neutral but the 2022 dots moved to show a 9-9....All but one dot (from 5) now show at least one hike in 2023 with the....In his press conference, Powell was surprisingly candid on a taper, saying....He also outlined that the taper would be completed around the middle of next....All this was more hawkish than anticipated but dollar strength was mild...In bonds we saw the 'policy error' trade kick off again with the long....Stocks remained comfortable though and that may underscore the push and pull....Ashraf reminds us in this video from 4 weeks ago why the taper will not be....nbsp; ....nbsp;..
