• Intraday Market Thought: Is Yen-Centric Risk Back?

  by Adam Button | Feb 20, 2020 17:34
  The yen plunge of the past two days threatens to re-write the rules of....We look at the move and the disjointed risk picture it unravels...Indices are tumbling across the board after high profile failure to follow-....Take a look at the historical GOLD vs YEN chart below...nbsp; Ashraf asked imagine how low would the S&P500 be today if ETrade did....كيفية إدارة الصفقات الثمانية فيديو للمشتركين...The playbook in yen trading for a generation has been to largely ignore....In addition, huge Japanese overseas investments and the tendency to bring....Is that dual axis breaking down? It's far too early to draw any conclusions....There is some element of risk appetite in play but gold is at 7-year highs and....What changed is a brutal GDP report at the start of the week...The 6...3% annualized drop is breathtaking and while a 3...8% fall because of the sales tax hike was anticipated, that's a much....Without annualizing, it's a 1...6% q/q decline, wiping out all the growth since mid-2017...It was followed up Wednesday by a poor machine tool orders report and the yen....The message of the market might be twofold:....1) That the BOJ will have to reach deeper into experimental policy...They've already crossed many previously-unthinkable thresholds and....2) The sharp drop in growth in Q3 shows that consumers and the economy can't....3) Coronavirus is now a consideration...Certainly Japan is at a higher risk of an immediate outbreak than the US or....Some say Japan was betting heavily on the summer' Olympics...Would the virus cause visitors to stay away from the Land of the Rising Sun?....4) The yen is no longer the only funder...It's not a coincidence that this takes place as the euro and Eurozone....In many ways – particularly on the deficit side and monetary policy side....This is something we have been highlighting for months and will be....Again, we have to emphasize that it's far to early to anticipate any kind of....A number of factors are in play including technical breaks and a squeeze....00 in USD/JPY and a breakout from unusually low volatility...A change in regimes isn't going to happen overnight, but we're watching..

• Intraday Market Thought: We’re Beyond Coronavirus

  by Adam Button | Mar 16, 2020 23:49
  The rout in risk assets is no longer just about the coronavirus...Yes, we can highlight a dozen economic negatives directly from the virus but we....We are not efficient market proponents, but the market is certainly capable of....The EU announced it's highly likely to be in recession, while the US Empire....فيديو المشتركين اذا كانت هناك صفقتين للشراء، ما هي؟....Even in a worse-case scenario of about 4% global mortality, you could argue that....Yet, what's being priced in now are the second-order effects...There are increasing solvency risks in the energy sector and mass bailouts in....The entire hospitality industry is under threat with countless small restaurants....An early tell on how the government will proceed, is the structure of an airline....The WSJ reports the White House is looking at $50B for airlines in an....The report says one of the possibilities is cash grants, and that's a....Ashraf estimates that by end of June, bailouts and federal govt assistance....Markets today, yesterday, Thursday, Wednesday, month to date, Year to date...While the market may initially cheer anything that safeguards shareholders,....Not only will it escalate costs and deficits but it raises the risk of....This is the time when the moral hazard from the 2008-09 bank bailouts looms....Everyone wants, expects and demands a bailout now...That's going to prove to be impossible...What the market is pricing in – at least partially – is social and....We have written often in the past year about the growing fractures in politics....This event is another spark that will light fuses around the world...In FX, the yen continued to gain ground in the volatility as the classic safe....USD/CAD hit 1...40 for the first time since 2016 and remains far too low for a global....We got a first taste of the scope of the US slowdown Monday with the Empire Fed....It plunged to -21...5 from +12...9...That's merely the leading edge of the economic cliff of coronavirus...nbsp; Another real-time data point to watch will be Tuesday's German ZEW....The consensus is a drop to -27...2 from +8...7.

• Intraday Market Thought: US Claims Conspiracy, Remdisivir Awaited

  by Adam Button | May 4, 2020 19:50
  US Indices paring their losses into the final hour of Monday's trade, while....Monday began deep in the red in Asia and throughout Europe after the US....May seasonals point to dollar strength and AUD weakness...Shutdowns relaxed in Italy and Spain...Trump raised the expected US death toll from Covid-19 to 100K and Russia....Gilead's newly approved anti-virus drug remdesivir will be sent to....A war of words is brewing between the US and China with the source of COVID-19....On Saturday, Fox Business reported that “there is agreement among most&....Secretary of State Pompeo took it a step further on Sunday and told ABC there is....However the TV exchange was as confused as it was remarkable as he said “....Moments later the interviewer told him that the release from the Director of....rdquo;....To be clear, this is third-highest member of the US executive branch....At best China will brush this off as an election tactic, but more likely it....A report on Thursday also suggested the US will pursue some kind of punishment....Even without the coronavirus, the deterioration in US-China relations....Worse still, the Oracle of Omaha was far-from inspiring at Berkshire Hathaway&....While he extolled America's ability to overcome challenges and predicted a....His actions spoke even louder as he dumped his entire position in US....May Seasonals & Payroll Tax Cuts....Risk assets are soft to start the week and the seasonal trend is for more along....May is the strongest month for the US dollar index and even more so for the....It's also the worst month for the Australian dollar and the euro over the....Meanwhile, Trump insists he won't pass any further stimulus measures to....The measure would be seen as a complementary strimulus to helicopter..

• Intraday Market Thought: Three Big Questions

  by Adam Button | May 22, 2020 18:23
  FX and indices remain reluctant to break out of recent ranges as the euro,....We await some catalyst to break the recent ranges or reinforce them...As market volumes wind down ahead of the long weekend holiday in the US and UK,....And here is a chart from Ashraf illustrating the near perfect symmetry....1) US-China relations....On Thursday US Senators announced a bill that would sanction China over Hong....The news hurt broad sentiment and pulled the euro back below 1...10...It's now almost a certainty that the path of US-China relations will be....The only question is how quickly and severely it deteriorates...Much of the prosperity and disinflation of this century has been a result of....Disentangling the supply chain doesn't necessarily undo that regime due to....One possible risk is that China and the US carve up the world into separate....China's recent spat with Australia suggests it's not in a rush to make....We're less sure but there's no reasonable path where this isn't a....Interestingly, Emerging Markets strategists are feeling in the mood-....Goldman Sachs went as far to say "buy the world's worst stocks because....And GMO told clients to buy the riskies of the risky: Argentina Debt...2) The virus....We still know so little about the virus, from how many people have fought it....Anti-body surveys have been over 20% in New York but are near 5% in hard-hit....There is no scientific consensus...The timeline and potential for a successful vaccine remains deeply....More importantly is a short-term read on how consumers will react...On Thursday, Starbucks said store sales were back to 80% of pre-COVID levels but....3) The great loosening....Austerity is dead...Voters won't vote for it and politicians are increasingly....We're undoubtedly entering an era of deficit spending but it's unclear....At the same time, central banks have shifted to a regime where they will keep....This is a dangerous game that ends in inflation and currency debasement but....All three are big, ongoing changes and add deep layers of volatility and....That won't last but for now markets are taking comfort in cheap, easy money....About our NEW WhatsApp Broadcast Group..

• Intraday Market Thought: The Moment of Truth?

  by Adam Button | Sep 21, 2020 23:15
  There are a long list of great uncertainties in financial markets right....The US dollar was the top performer while the New Zealand dollar lagged...The US Richmond Fed and existing home sales are up next...The Premium DOW30 trade hit its final target of 27050 for 1210 pt gain and....nbsp;By the time Nasdaq completed its 14% high-to-low decline, it ended up....Yet, all indices remained below their 55-DMA...nbsp;Do not waste time...nbsp;Skip to the 5:00 mins of the clip of the Sep 3rd video (week of Sep top)....nbsp;....Since the pandemic bottom, the balance of rates vs uncertainty has tilted....It's led to unprecedented bounces is equities, a major move in gold and....By many metrics, it's gone too far...Then again, central banks may have also gone too far...In explaining his FOMC dissent on Monday, Kaplan said the Fed risked inflating a....Up until Monday, the dip in technology stocks was largely ignored by the FX and....That changed with equities taking a broader leg down on Monday, led by....What may have changed is that rising COVID case numbers are triggering fears....The US has so far shown a high threshold for COVID-driven economic weakness but....Most likely, the kinds of numbers many US states are tolerating right now would....The balance of it all begs for another look at the charts...Despite some larger moves on Monday, there were few breakouts...Cable held the Sept low, the euro rebounded back into the range from a....Here is a recap of Ashraf's calling the top of gold & silver 15 hrs....nbsp;....Note too that markets bottomed in June on the Monday after the FOMC...In spite of the mountain of worries, the potential for a vaccine and easy policy....Ultimately, it will come down to the charts and the data...On Tuesday we get August existing home sales (exp 6...0m) and the September Richmond Fed (exp +12)....nbsp;....Soft numbers and other day like Monday would be a strong signal.

• Intraday Market Thought: Disorderly Debate Clash w/ Quarter End

  by Adam Button | Sep 30, 2020 15:26
  The debate was a mess but Joe Biden likely improved his standing...For markets though, the question of who will win the election remains the wrong....The risk is that we won't get a clear winner, or that the losing side....Indices sold off after the debate into early Europe on the rationale that Trump....But a fresh rallied ensued on emerging hopes as House speaker Pelosi moved....2 trillion proposal...Ashraf published this chart analog below, many of you can figure out the....Given the polls, Joe Biden should be a prohibitive favourite but a series of....That uncertainty is going to linger right up until the vote but in Tuesdays&....The inevitable response to polling leads is that Hillary Clinton was also ahead...That's true but she wasn't this far ahead...The RealClearPolitics average puts Biden at 49...4% and Trump at 43...3%....A month ahead of the election in 2016, Clinton was up by 1 point...In 2016 there were also far more undecided voters than today...Swing state polls are less reliable but there are enough to draw the same....Ahead of the debate, the attack against Biden has been that his mental acuity is....Watching it, that was clearly not the case...He's not as sharp as he was a decade ago, but he handled the non-stop....Betting markets showed an uptick in Biden's odds after the debate to put....The odds in the Senate are tighter and the result there will determine if....As for markets, it's not going to be as simple as some would portray...Biden has promised to raise the corporate tax rate but if the market was....The reality is that Congress would need to hike rates and there are far too many....In the shorter term, policy is a secondary concern and the real risk is....It's extraordinarily difficult to handicap the odds of turmoil following....Similar comments weighed on markets earlier this month...That talk from Trump won't go away and could have repercussions way beyond....Even if he's thrown out by both parties he will still hold an incredible....There will continue to be opportunities  in trading around this trainwreck..

• Intraday Market Thought: Bond Market Rejects 1%

  by Adam Button | Nov 13, 2020 19:32
  Markets are up along with metals, but a crucial development is Thursday's....0%....In fairness, yields did break above the 200-DMA as well as the trendline....We mentioned in Thursday's IMT wheat and oil...More on the deflation-Reflation battle below...Look at them now...As we speak, USD is weak across the board, except for CAD as oil fails to....nbsp;Ashraf issued a new Premium trade, warning that only those with....nbsp; ....Deflation-Reflation Battle....Yield's failure to regain the 1...0% helped boost metals across the board, but the question remains whether today&....89% is merely a pit stop before a fresh breakout...Bonds summarise the battle between the deflation and reflation camp, with the....The reflation camp anticipates successful vaccine to usher a new wave....nbsp;....The arm wrestle between easy money and virus worries is the dominant theme of....Vaccine news at the start of the week gave markets a huge jolt but much of....Similarly, sterling gave back some of its recent gains on Thursday as Brexit....Negotiations will continue next week and if positive developments don't....Today's GBP bounce is part of an overall USD pullback, with the moment of....nbsp;....In terms of economic data, US initial jobless claims were at 709K compared to....That's the best week since the pandemic got underway but still remains....Given the rising odds of new restrictions in the weeks ahead, we may....If they begin to rise again that may tilt markets further towards risk....Members of WhatsApp Broadcast Group, had sucessful trades in DAX, Nasdaq,..

• Intraday Market Thought: Yen vs Gold - The Extreme Trade

  by Ashraf Laidi | Jul 8, 2015 14:51
  Gold's accelearating sell-off since June 18 highlights the metal's....Oil's 19% decline from its May highs at a time when central banks have....We saw these price worries escalate back in January-February in the midst of the....And with gold seen as a hedge for inflation, any signs that disinflation....The 34% plunge in the Shanghai Composite index over the last 3 ½ weeks....The aforementioned dynamics explain yen's outperformance relative to all....The acceleration of gold's sell-off since June 18 highlights the metal's....Oil's 19% decline from its May highs at a time when central banks have....We saw these price worries escalate back in January-February in the midst of the....And with gold seen as a hedge for inflation, any signs that disinflation....The 34% plunge in the Shanghai Composite index over the last 3 ½ weeks....The aforementioned dynamics explain yen's outperformance relative to all..

• Intraday Market Thought: On the Latest US Dollar Weakness

  by Adam Button | Nov 22, 2017 22:03
  The main catalyst for US dollar bulls over the past 2 months has been tax....nbsp; The yen was the top performer Wednesday while the US dollar lagged...New Zealand retail sales beat estimates in early Asia-Pacific trading...One of the two Premium trades in EURUSD took 90-pip gain...6 of the existing 8 Premium trades are currently in the green...For months various markets have been pricing in changes to the US tax code...It's impossible to say exactly what's priced in but it's clear that....So why the US dollar weakness?....We've been writing this week about the divergence between stock markets and....In the past , there has been a solid correlation between the pair and equity....Recently, however, the S&P 500 and Nikkei have soared while USD/JPY has....One theory is that traders are wary of 'selling the fact' and getting....Perhaps that's true...Another is that the Fed is increasingly getting worried about low inflation...Today's release of the FOMC minutes showed some members want to hit the....There is probably some truth in that as well...Back to the tax story...The dollar is selling because of the tax plan...More specifically, the details of the plan...It's increasingly clear this isn't a broad-based tax cut...It's heavily skewed to corporations and the top earners, while offering....See Ashraf's notes on the disappointing tax holiday for US....Maybe the market is saying that this plan isn't going to boost incomes,....Instead it will add to the deficit and lead to spending cuts down the road...What it will do is boost corporate profits and that explains the rosy....Whatever the reason for the dollar selling, the USD/JPY chart sent a major....It broke the 100-day and 200-day moving averages, along with the October low in....It was part of a broad dollar rout...It's tempting to brush aside because of the US holidays but this move is too....Looking ahead, the Asia-Pacific calendar is light...Early in trading the Q3 New Zealand retail sales report showed a 0...2% rise excluding inflation...That's better than the +0...1% expected and the kiwi caught a small bid on the release.

• Intraday Market Thought: Is the Worse of the Aussie Behind ?

  by Adam Button | Nov 26, 2015 23:48
  The latest economic numbers in Australia point to a stunted economy but there....In FX trading on the US Thanksgiving holiday, the dollar didn't get any....Japan's Oct CPI rose 0...3% y/y, beating expectations of 0...2% and previous 0...0%....The Premium Insights have two GBP trades ahead of Friday's release of UK Q3....Yesterday's Australian capex numbers were the worst in 30 years of records...Private capital expenditures fell a whopping 9...2% compared to the -2...9% consensus...The immediate reaction was a 40-pip decline in AUD/USD but it's....That's two poor readings for Q3 ahead of the RBA decision on Tuesday and....What's impressive is that the market hasn't shuddered despite such scary....If the Aussie can make it past the RBA and GDP without another push lower, it&....China and commodity prices will continue to be factors to watch but barring....Once Q3 is in the rearview mirror, the RBA may look towards the middle of next....Note that that in Sept/Oct/Nov there has been a series of higher lows in AUD/USD...The employment report was probably a mirage but AUD has been hit by some....We often ask: If something can't fall on bad news, why should it fall at..