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GBPUSD long off election news in anticipation of Fed.Logistic Wealth Management Strategist-Tanner Elphee 6/12/17 GBPUSD sold off harshly after election results. Me being the novice trader I am jumped right in off the first woosh bar. Set my stop behind the first wick and through the night it stopped me out. In hindsight the stop was way too close and I really have no clue what is going on in UK. I know the USD is expected to fall, if move at all, Wednesday after the fed meeting. That being said XXX/USD pairs should continue to rise like eurusd. The whole situation is out of the ordinary and this setup looks too good to miss again. I've waited patiently and here is my precision entry. I'd certainly expect a reasonable fill between now and Wednesday. GBPUSD short 50k Entry 1.25708 Stop (no place particular) 1.26500 Target 1.295 Disclaimer - LWM is a fictional company at this point of time. Naming rights are not owned. The views and beliefs of current market conditions are not intended to be acted on without proper evaluation and understanding according to your own trading plan. Trade at your own risk!
Long
by UnknownUnicorn981629
EURUSD UncertaintyCurrently, the sentiment of the pair seems to be clearly inclined to a down movement of the price. But we should rather wait until Friday to find out more about what will be the real direction of the pair. Note that the US is strongly considering a hike in interest rate which can cause the USD to grow much stronger. However, the France is currently on crosshead of most European traders. Le pen is one step ahead against his opponent. Her winning the presidential election will be crucial for the Euro and combined with the increase in the FED Interest rate we can almost definitely conclude that the EURUSD pair will undergo a downfall.
Short
by Hizmaylof
FED FOMC RATE DECISION HIGHLIGHTS - DXY/ USDJPY SHORTSAs expected the fed decided NOT to change the fed funds rate or discount rate. We could/ shoud see some USD flushing of fed funds for september to the downside I stick with my 99.5 to 100 for USDJPY shorts as attached. Attention now turns to Yellens speech in 30mins - deeper analysis to come then. FOMC Rate Decision: Fed Leaves Policy Rate Unchanged, Says Case For Rate Increase Has Strengthened Fed Sees Lower Rate Path in 2016, 2017, 2018 and Longer Run Fed Sees One Interest Rate Increase in 2016, Two in 2017, Three in 2018, 2019 D Three Fed Officials See No Rate Increase in 2016, Up From Zero in June Fed: Decided To Wait 'For The Time Being' For More Progress Toward Goals Fed Officials See Fed Funds Rate at a Median of 1.125% at End of 2017 Fed: Market-Based Inflation Compensation Measures Remain Low Just Four Fed Officials See More Than One Rate Increase in 2016 DJ News Fed: Expects Moderate Pace of Economic Growth, Labor Market To 'Strengthen Somewhat Further' Fed Officials See Fed Funds Rate at a Median of 0.625% at End of 2016 Fed: Near-Term Risks To Economic Outlook Appear Roughly Balanced Cleveland Fed's Mester, Kansas City Fed's George, Boston Fed's Rosengren Dissent On Fed Policy Action George, Mester, Rosengren Preferred To Raise Fed Funds Rate To 0.5% To 0.75% Fed Continues To Closely Monitor Global Economic, Financial Developments Fed Continues To Closely Monitor Inflation Indicators Fed: Economic Growth Has Picked Up From Modest Pace in First Half Fed: Market-Based Inflation Compensation Measures Remain Low Fed Officials See Fed Funds Rate at a Median of 1.125% at End of 2017 Fed: Survey-Based Inflation Expectations Measures 'Little Changed' Fed Officials See Fed Funds Rate at a Median of 1.875% at End of 2018 Fed Officials See Fed Funds Rate at a Median of 2.625% at End of 2019 Fed: Inflation Continued To Run Below 2% Target Fed Officials See Fed Funds Rate at a Median of 2.900% in Longer Run Fed Officials See Slightly Lower GDP in 2016, Unchanged in 2017, 2018 Fed: Inflation Expected To Rise To 2% Over Medium Term As Transitory Effects Fade Fed Median GDP Projections: 1.8% in 2016, 2.0% in 2017, 2018, 1.8% in 2019 Fed Officials See Unemployment Rate Higher in 2016, Unchanged in 2017, Lower in 2018 Fed: Labor Market Continued To Strengthen Fed Median Unemployment Projections: 4.8% in 2016, 4.6% in 2017, 4.5% in 2018, 4.6% in 2019 Fed: Job Gains Have Been Solid in Recent Months, Unemployment Rate Little Changed Fed: Household Spending Has Been Growing Strongly DJ News 2016.09.21 20:00:00 Fed Median Longer-Run Unemployment Projection: 4.8%, Unchanged From June Fed: Business Fixed Investment Remained Soft Fed Officials See Lower Inflation in 2016, Unchanged in 2017, 2018 Fed Median Inflation Projections: 1.3% in 2016, 1.9% in 2017, 2.0% in 2018, 2019 Fed Median Longer-Run Inflation Projection: 2.0%, Unchanged From June Fed Leaves Discount Rate Unchanged At 1.00% Fed Median Core Inflation Projections: 1.7% in 2016, 1.8% in 2017, 2.0% in 2018, 2.0% in 2019
Short
by QuantumLogicTrading
3
EURUSD: IT'S ALL IN THE CHART - 1.10 AVG TO CONTINUE IN MED-RUN?EUR$: 1. The Greece Debt crisis induced an agGressive 3000pip+ sell-off in just 6m (-22%). As the crisis "resolved" EUR$ however failed to retrace any of its losses. - Instead EUR$ looked to adopt these new crisis lows as what has become a long-run trading range - the likely explanation would be that future FED/ ECB monpol divergence was priced "early", hence we have maintained the crissi lows. 2. Going forward this explains why EUR$ hasnt made more downside declines from 1.10 despite added Fed tightening and ECB easing - and could imply that we will remain tightly rangebound here (1.05-1.15) as future ECB/ FED monpol divergence is likely to taper off as ECB easing comes to an end, which will potentially off-set the inevitable added FED hikes. 3. Though my bias would still be lower from EUR$ as Fed hikes, and the steepness of their hike cycle is likely to become more aggressive, whereas the ECB easing fade off-set is arguably less of a bullish factor than hikes are a bearish factor. - HOWEVER, once again it is uncertain how much forward ECB/ FED monpol pricing has been done already in this 3000pip move lower, it could be that until fed funds reaches 2% (for example) that the divergence isnt enough to justify more than the 3000pip move lower that we have seen. It may take a much more aggressive steepening in monpol divergence between ECB/ FED (than what has been generally expected) to drive EUR$ to parity, the extent to which I do not know.. - Also the ECBs easing cycle, and whether it comes to the end (or is extended further) may possibly play a big role on the degree that this 1.10 equilibrium holds. ECB adding QE another 6m out to march 2017 and 240bn would only weigh in the bears favour, though once again the effect may be muted somewhat due to the above. Any questions or other ideas please comment below!
by QuantumLogicTrading
4
USD/ DXY: NFP FAILS TO ANSWER SEPT HIKE & FED LACKER SPEECHThe USD Jobs report missed expectations across the board with the print, earnings and URate the like. Market reaction was interesting to say the least, initally we said dollar trade aggresssively on the offer, however not for long. it was USD bulls who look to have closed the day winning. On reflection this makes sense given fed funds rate held up relatively well only shedding 3pcts, and 150k jobs is still well above the 50-75k target needed to maintain employment levels which have been stated by a few Feds already as "at full employment". USD positioning: Initially I was a $yen bear, however offers there were squeezed out on the break above 104 likely on yen supply as risk markets moved higher and some dollar demand as jobs added was significantly more than Fed Mester said this week was enough to maintain the economy at full employment (50-100k jobs). Instead my focus now has moved to Equities market where I added SPX shorts at 2180 average price and hedged some of that exposure with some pre-existing Apple longs from earlier in the week when EU Tax allegations brought the stock into the low 105s. USD FX trading from here imo will remain very choppy as there once again remains no clear consensus on medium-run positioning/ further hikes from the Fed as US data continues to trade below expectations, thus I will adjust my strategy to suit (tone down FX positioning) whilst look to add some cross asset positions instead. I will however continue to be on the lookout and post if there is any statistical opportunities, as these are tradable in any environment. $Yen I will also watch closely and also GBP Services PMI data on Monday will be vital to STG trades. Fed Lacker Speech Highlights: Fed's Lacker: Fed Rates Should Be 'Significantly Higher' Based On Rules Lacker: Rate Benchmarks Are Good Guide For Setting Fed Policy Lacker: Economy Continues To Make Progress On Jobs, Inflation Lacker: Current Jobless Rate Essentially At Full Employment Level Lacker: Taylor Rule Points To 3.3% Fed Funds Rate For Third Quarter Lacker: Economy Adding Jobs At Double Pace Needed For Population Growth Lacker: Inflation Moving Back To 2% Price Target Lacker: Fed Could Deal With Inflation Problem With Rapid Rate Increases Lacker: Rapid Rate Increases Would Cause Pain To Economy Lacker: More Attention Should Be Paid To Inflation Risks Fed's Lacker: Level of Discouraged Workers Not Historically Elevated Lacker: Some Uncertainty Around Exact Level of Full Employment Lacker: Reverse Repos in Place as Long as Needed, May Not Need in Future
TVC:DXY
by QuantumLogicTrading
2
FADE SHORT GBPUSD ON RALLIES: FED KASHKARI SPEECH HIGHLIGHTSSame onld rhetoric from Kashkari - nonetheless i remain short GBP$ on rallies into 1.315/25, given DXY's advances GBP$ has been an outstanding under-performer given 1.315 is the levels we closed on friday/ opened on monday. However, Manufacturing and Construction PMIs are a risk, any topside sterling could certainly trade to the upper levels of the range (1.325) and possibly even test 1,33 - depending on the beat. TP levels should be 50-100pips lower at 1.3100 or 1.3050, longer term trades, or bets on USD Jobs report outperforming, with UK PMIs under-performing could easily aim for 1.2910. Risks for the PMIs are neutral going in, they have ben set higher than last, however UK data has generally outperformed, though GDP was flat and business investment negative (though better than expected). Risks for NFP are neutral-downside, given the 180k "low bar", however the downside risks are the fact weve had 2 massively outperforming prints which could see some mean reversion making this print unusually lower.. The upside is obviously the low figure and the fact ADP Non-farms came in above expectations, though only by a few 1000 and ADP-NFP correlation isnt that high. Nonetheless, I remain short on rallies data dependent.. given the BOEs monpol changes and the FOMCs low but started hike cycle the equilibrium should be well below 1.30 - especially as PM Theresa May confirms no back doors will be used to void brexit and that will definitely go ahead. USD STIR Fed Funds trade higher today also for september implying a 27% probability vs 24% yesterday which gives more upside arguements for USD, though long term govies today trade broadly lower across the 2-30yr curve but only marginally, with 2yrs down 2.4bps (-2.9%) on the day. Though Sterling UK 2yr govies trade 1.4bps (9.09%) lower Fed Kashkari Speech Highlights: Fed's Kashkari: Need More Data Before Decision on Rate Increase Kashkari Wants to See Core Inflation on Rise Before Rate Increase Kashkari: Fed's Governance Structure Should Stay as Is Kashkari Hasn't Seen Inflation Increase Yet Fed's Kashkari: Need More Data Before Decision on Rate Increase
Short
by QuantumLogicTrading
2
DXY/ USD: THE WEEK AHEAD - ITS ALL IN THE CHARTDXY: 1. Given the firming of USD STIR/ Fed funds following Yellens JH remarks and the markets hawkish reaction i still think there is another % or so of topside to be priced into USD topside. - Fed funds implying 36% probability of a Sept hike - the highest implied prob in 3 months - hence given cables 50pip appreciation i feel theres another 100pips here to be priced at least in the fron end (tuesday/weds) of next week. 2. The 1yr MA and then the 6m highs are the next targets higher at 96.5 and 97.5 - i feel the market can move to 96.5 based on the steepening of the fed funds curve (now implying 1 hike at close to 100% for 2016 vs 70/75% previoiusly) at the front of next week but then we will need a firm NFP beat to move to the next level higher at 97.5 or 6m highs. 3. Dollar index aside, gbpusd is my favourite expression of long USD aside from DXY - profit target of 1.300/5.
TVC:DXYLong
by QuantumLogicTrading
SELL GBPUSD & USDJPY: FED CHAIR YELLEN JACKSON HOLE HIGHLIGHTSYellen as interpreted by the market was bullish, though price action immediately following the JH Speech Highlights was anything but this clear cut and imo said alot more about what was actually said i.e. there is still uncertainty/ no clear commitment, as DXY moved higher immediately after before aggressively selling off for the next 20-30minutes, before then making what looks to be now the decisive move higher, concluding the markets decision to view here statement as hawkish. One of the contradicting elements I found was her view on the near term possibilities, where in this statement, implied at the least that things arent as rosey as the market may think - "Fed Can Provide Accommodation Should Expansion Falter in Near Term" - a truly recovering economy wouldnt need this statement but maybe this is nit picking, but nonetheless could explain the lack of certainty that caused the USD sell-off initially. The USD 30D Fed Funds futures rallied to imply a P=30% chance of a September hike, up from 21% yday and one of the highest post-brexit readings, with equities look to have broken lower, whilst gold remains in bull territory, despite the USD appreciation implying what is expected to be the start of a broader medium term risk-off shift now. Given this fresh lease of life in USD STIR, attention will now closely focus on the USD employment report next friday, where if another 250k+ print comes in im sure we could see another 10pct addition to the september odds, if not more - especially if the unemp rate fell close to the feds terminal expectations of 4.8%. From a trading perspective, and the above information in mind, I remain long on USD vs GBP on rallies - 1.32 or 1.325 prices are the best to engage.. On hind sight some legacy longs should have been added in the post-Yellen vol to 1.328 but given the uncertain comments it is forgivable not to have added/ held here. Next weeks, UK PMIs will remain key for Sterlings hold above 1.30/29 level - a miss and we will likely test lows again, though a hit and sterling bulls will likely continue to be happy to own the pound here in the low 1.30s on the pretence that Carney will not e so forthcoming in future policy despite his aggressive dovish fwd gd. Also I am watching USDJPY - given US equities may pop on the back of this, short gbpjpy or usdjpy to own a risk off asset may prove to be a good call - especially at the 133 level for sterling. This also hedges the long usd exposure in the event data doesnt hold up. Yellen JH Speech highlights: -Fed's Yellen: Case for Increase in Fed Funds Rate Has Strengthened in Recent Months -Yellen: Growth Has Been Sufficient to Generate Further Improvement in Labor Market -Yellen: Economic Outlook Uncertain, Monetary Policy Not on Preset Course -Yellen: Economy Continues to Expand, Led by Solid Growth in Household Spending -Yellen: Range Of Reasonably Likely Outcomes For Fed Funds Rate 'Quite Wide' -Yellen: U.S. Economy Nearing Fed's Goals Of Maximum Employment, Price Stability -Yellen: FOMC Continues to Anticipate Gradual Increases in Fed Funds Rate Will be Appropriate Over Time -Yellen: Even If Average Rates Remain Lower Than In Past, Monetary Policy Will Be Able To Respond Effectively Under Most Conditions -Yellen: Fed Studying Many Issues Related To Policy Implementation
TVC:DXY
by QuantumLogicTrading
SHORT USDJPY LONG NZD/AUDUSD: FED KAPLAN SPEECH HIGHLIGHTSFed Kaplan unsurprisingly maintained the tune of his fellow members and kept the tone hawkish, with no mention of recent data undershoots but also interestingly on the hawkish side like the others failing to mention the record highs in the US Equity markets. From here USD is in a tricky position, a open-close below the 2yr MA may signal a broader and more sinister USD selling trend that may stay for a while (unltil Nov/ Dec) given election year, poor data and Fed unlikely to hike until Dec despite their best efforts to convince the market otherwise BOJ style - much of which near term focus now shifts to Fed Chair Yellens speech next week and the infamous GDP/ Durable goods orders, where if misses, will no doubt cause USD selling and USD STIR selling on an unparalleled scalem imo regardless of what Yellen says (100% going to be hawkish in a bid). However all may not be lost for the USD/ FOMC rate hike cycle, this USD selling could bring some needed life to near-term inflation and give the Fed the data they so badly seemingly desire, of which many are overlooking. Nonetheless, preparing for the worst $yen shorts seem appropriate, as the US equity rally is waiting to pop anytime and markets shift into risk-off where yen and gold longs will dominate to new yearly highs. Also the HY kiwi and aussie pairs which have little in the way to stop them post RBA/ RBNZ and after an above average employment report this week leading them into a 0-data week next week and only AUD Retail Sales eyed the week after for the two; thus any next week USD selling would be matched perfectly by kiwi and aussie buying if it is the case, whilst the yen longs are likely to be a 1-4wk play as we wait for risk assets to pop. USD Feds funds rate opt implied P of a sept rate hike currently trades at 18% vs 15%yday up on hawkish Fed speakers though the USD/ DXY got sold net on the day regardless hinting that the USD selling is becoming less of a Fed function and more of a medium-term trend/ election pricing. Dec was down on the day at 40.3% vs 41.7%yday. Fed Kaplan Speech highlights: -FED'S KAPLAN: AN AGING WORKFORCE IS ONE OF THE BIGGEST THREATS TO THE US ECONOMY -FED'S KAPLAN: POLITICAL SCENE DOES NOT / SHOULD NOT AFFECT THE FED & MONETARY POLICY -FED'S KAPLAN: THE DOLLAR HAS BEEN STRONG AND HAS HURT EXPORTS, CHINESE GROWTH COMING DOWN -FED'S KAPLAN: BREXIT EFFECT IS MANAGEABLE IN US -FED'€™S KAPLAN: THERE IS ROOM TO CHANGE RATES BUT NOT MUCH DUE TO LOW NEUTRAL RATE
TVC:DXYShort
by QuantumLogicTrading
1
GBPUSD SHORT: DOVISH BOE M. CARNEY SPEECH HIGHLIGHTS - AUG CUTIMO Mark Carney was very dovish on the margin, certainly reinforcing their/ my view of an August cut being 90% on the table. The most supportive statements were "MonPol Important In Cushioning Effects Of Any Relapse In Recovery In Months & Quarters Ahead", "The MPC Does Not Have The ''Luxury '' and "More Should Be Done To Cushion The Effects Of Negative Shocks" - all of which infer that an August cut is very much on the cards - especially given that the BOE has been relatively neutral as yet, whilst they have increased the offering of interbank funding by a few £100bn, apart from that the BOE is yet to make any moves in conventional policy tools, which member/ market expects the BOE to do e.g. a Bank Rate cut and/or formal QE. I personally am short GBP$ at these levels (see attached posts), and these comments from today have certainly reinforced my position given their dovishness, even more so when combined with yesterdays minutes which said "most MPC members expect to loosen policy in August" and "detailed analysis of all available policy tools is required" - both of which go hand as 1) they want to make sure they analyse the economy properly, which takes time (July too soon) yet all members expect August to be enough time to conclude/ act upon such analysis. Not to mention, given bank forecast a median GBP$ price of somewhere near 1.225, being short in the 1.30+ imo is certainly probabilistically favourable, especially if you are able to execute close to the Post-brexit highs of 1.35 which has held as solid resistance and imo should do for the foreseeable future given we traded to lows of 1.38 before brexit so 1.35 is very expensive post brexit. Further, the median bank forecast was for a 25bps cut in the bank rate in July (with some calling for 40-50bps), so if that was the case in July, given BOE didnt deliver, this only increases the chances of a cut in August which imo will take GBP$ to 1.25xx. USD demand increasing - Federal Funds Rate Implied PDF prices: Also, on the USD side, demand is increasing which compounds the GBP$ short support, as the Fed Funds Rate implied hike probabilities are continuing to steepen. For example, since yesterday, the implied probability of a September/ November hike has increased from 12%/12% to 19.5%/20.8% - with, for the first time, a 50bps hike being priced at 0.4%/0.8% respectively; Decemeber's probability also steepened to its highest level post brexit to 40% from 33.7%, 50bps at 7.5% from 3.4% and 75bps for the first time at 0.3%. This aggressive steepening in the rate/ probability curve is likely a function of the risk-on market we are in (SPX 4 new highs in a row), with 10y rates rallying TNX, averaging +4% every day this week. Further, I think the FOMC speakers comments which have 80% been hawkish this week has also increased confidence. Gov Mark Carney Speech Highlights - Monetary Policy Cannot Do Everything To Counter The Impact Of The Referendum - MonPol Important In Cushioning Effects Of Any Relapse In Recovery In Months & Quarters Ahead - BoE July Minutes, ''Broadly Consistent With My Personal View.'' - The MPC Does Not Have The ''Luxury '' - Far Too Early To Draw Strong Conclusions On Precise Path Of The UK Economy - UK Economy Is Unlikely To Crash, It Is Likely To Slow - A Sharp Fall In Currency Rate Will Provide A Shot In The Arm To The UK’s Net Exports - More Should Be Done To Cushion The Effects Of Negative Shocks - Past Few Weeks Have Generated Considerable Uncertainty Around UK Economy, Policy & Politics - Monetary Policy Should Stand Ready To Move In Either Direction - Brexit Has Increased Materially The Degree Of Uncertainty - Some Of This Uncertainty May Dissipate, But A Good Chunk Is Likely To Linger Over Next 2-Yrs - Uncertainty To Weigh On Domestic Spending By Both Companies & Households For Foreseeable Future - The Amount Of Slack In The UK Economy Is Likely To Steadily Rise
Short
by QuantumLogicTrading
LONG DXY/ USD VS GBP: HAWKISH FOMC LOCKHART SPEECH HIGHLIGHTSFOMC Lockhart was the 4th Fed this week to imo be relatively Hawkish with his words, most notably reinforcing with the others brexits near-term stability saying "Doesn't Expect 'Brexit' to Have Near Term Impact on Economy" and " So Far 'Brexit' Reaction Largely Orderly". Most interestingly though was Lockharts view on the FOMC's positioning for future rate increases, saying "Won't Rule Out Two Rate Rises This Year" - which is extremely hawkish given most expect 1 at the most.. Back up this sentiment by insisting that the Fed is "Fed Not Behind Curve, Has Time to Decide on Next Rate Move". Nonethless Lockhart did somewhat contradict his "rate expectations" by saying "Time for 'Cautious and Patient Approach' to Rate Policy" which surely shouldn't be the case if 2 hikes are coming - that would be on the aggressive side. All in all, Lockharts comments go hand in hand with my Bullish medium term USD/ DXY view (see previous articles) - I like the USD vs EUR, JPY, GBP, AUD, NZD in the medium term so long DXY/ USD is favoured, even more so if 2 rate hikes were to be realised this year. At current levels short GBPUSD is my favourite expression FOMC RATE HIKE IMPLIED PROBABILITIES - On the likelihood of rate increases, in the past 24 hours, from the Federal Funds Rate implied probability curve we have seen rates/ probabilities firm after yesterdays "risk-break" recovery, with a 25bps September/ Nov hike steepening to 17.2% from 11.7%(Wed), and Dec setting new highs at 35.9% from 29.5% (Wed) - Dec also went on to double the probability of a 50bps hike to 5.1% vs 2.8%(Wed), giving Lockharts comments some weight. FOMC Lockhart Speech Highlights: -Fed's Lockhart: Fed Not Behind Curve, Has Time to Decide on Next Rate Move -Lockhart: Time for 'Cautious and Patient Approach' to Rate Policy -Lockhart: So Far 'Brexit' Reaction Largely Orderly -Lockhart: 'Brexit' Will Increase Long Term Uncertainty -Lockhart: Doesn't Expect 'Brexit' to Have Near Term Impact on Economy -Lockhart: Bond Market Yields Largely Reflect Flight-To-Quality Buying -Lockhart: Too Soon to Say 'All Clear' for Financial Markets -Lockhart: 'Brexit' Not a 'Leman Moment' -Lockhart: Still Expects U.S. to Grow by 2%, Expects More Job Gains -Lockhart: Economy is 'Performing Adequately' -Lockhart Says Fed Has Time to Decide on Next Rate Move -Fed's Lockhart: Presidential Election May Be Boosting Economic Uncertainty -Fed's Lockhart: Won't Rule Out Two Rate Rises This Year
TVC:DXYLong
by QuantumLogicTrading