ON
$ON coiled w/ IHS on daily$ON coiled w/ inverted H&S on daily.
$592K trade seen on Oct 21 10 calls today.
Looking for a move up.
ON SEMICONDUCTOR: EXPECTING A BIG DROP ON DAILYON SEMICONDUCTOR seems in a corrective phase with more upside still possible. At the end of this correction i'm expecting a big drop with a breakout to the downside. Expected target on chart.
SPX: BOJ MISS = BULL RUN END +2% + 2016 SAFE HAVEN TREND RESUMESEnd of the bull run
Global Equity Indexes:
1. SPX/ Global Equity indexes in the past 2/3wks saw a post-brexit central bank easing induced rally, as many CB released dovish statements following the vote which spurred investor confidence in fresh easing.
- IMO much of the bull run was based on BOJ easing hopes, given the size of the economy (4th largest) stimulus from the BOJ had risk sentiment increasing affects - though now in light of no new easing from the BOJ and many CBs shrugging off/ UK internalising the brexit impacts I believe this bull run is over.
2. Technically speaking we may see another week or two of sideways or +1% as the market awaits easing policy information from the BOE (6th largest economy), but past this and regardless of what the BOE does i think the upside bias will cease. BOE is only likely to inject 50bn over probably 6m+ which is a drop in the ocean relatively as the BOJ does 100bn+ in one month, so by mid august latest I expect risk-markets to turn sour and a 10% correction is likely.
Confirmation the risk-rally is over:
- During this bull run we have seen risk markets/ SPX make gains rather frigidly, one day up one day down has been the trend - rather than the usual breakout green green green rallies of the past - this to me indicated that the topside was cautious and reinforced my view that it was central bank driven (not equity market performance driven). Thus, Confirmation of the trend turning to risk-off will be consecutive days of risk markets falling (SPX/ global indexes) OR consecutive safe haven markets rising (Gold, UST, Yen) and the emergence of a strong negative correlation between the two assets will be a solid second indicator that the 2016 risk-off trend is back.
Trading Strategy - a number of ways to play this one:
1. Short FTSE100 @6700 or 7000 (wait for BOE) - this is my favourite trade but has a few conditions. We have built some resistance at the 6700-800 level so here isn't a bad place to sell however i think we will get a better selling vantage point next week, assuming the BOE cut the bank rate 25bps.
- The BOE easing should move FTSE100 up 3-4% in a few days into the 7000 ATH key level as easing boosts business conditions and a lower GBP increases FTSE company international competitiveness. The 7000 level is where I am aiming for FTSE shorts with sell-limit orders as 1) its all time high levels; 2) I like to fade central bank action since it is artifical; 3) the broader risk-run is over so FTSE will suffer with the rest of the market
2. Short US Indexes @Market - SPX is perhaps the best short ATM given it trades right at its newly set all time high levels and on the backdrop of the BOJ miss we should see some downside soon.
3. Long Yen @mrkt - in the immediate term my favourite trade I like long Yen (for 200-400pips) against USD and GBP, given the BOJ backdrop is most related to JPY markets. We have already we seen the risk-off transmission taking place in here as Nikkei sold off 2% after the result and JPY grew 3% but i still think in the immediate term e.g. 1wk we can see more JPY topside and Nikkei weakness - me prefering to trade the FX strength over the equity as the equity often follows as a function of FX strength.
4. Long Bonds or Gold @mrkt - for the medium/ longer term I like buying govt debt, particularly UK gilts (BOE QE increases demand) or Gold - Gold we saw move higher on Friday in reaction to the BOJ so it will be interesting to see if we can get risk-off confirmation run from this next week (look for 3/4 green days).
Risks to the view:
1. US Earnings have outperformed imo on average this Q, so the risk-run may be sustained for longer than the 2wk window that I expect. Nonetheless, i think even this is capped at 4wks e.g. we should be in full bear mode by the start of September - look out for the confirmation, a run of 3/4+ days of consecutive safe haven gains is often all the markets have to signal to show
BOJ EXPECTATIONS: EXCEED/ HIT - LONG USDJPY; MISS - SHORT GBPJPYBOJ Miss - Sell GBPJPY @Market price; 129tp1 - up to 800pips.
1. A BOJ miss can be considered as delivering the median expectations e.g. 10bps cut to the depo (-0.2%), 10bps cut to the LSP (-0.1%), Yen10trn increase in monthly JGB purchases & 50% Increase in Annual ETF purchases e.g. 3.3trn-5trn. Fiscal Stimulus Yen10-15trn.
- The package above or less should be sold as the market expects this to maintain UJ at 105-6 level.
- The short GBPJPY is a great trade anyway as you benefit from the BOE easing carry which should in turn move us to 125 (BOJ miss and BOE hit) - which the BOE 1m forward OIS rates market currently prices 25bps at 100% and the average expectations are 25bps and £50bn of QE (even more certain now as the BOE M. Weale - the most hawkish MPC Member moved to the easing side as Business optimism and PMI dropped to their 10yr lows) - thus GBPJPY can expect further downside even past the BOJ as the BOE is all but guaranteed to ease "most members expect to ease at the august meeting" - July BOE Minutes Quote.
- Currently a BOJ miss is the most likely outcome - as many of you have seen in FX Yen has been brought aggressively as expectations have fallen, much a mirroring from the change in rates market where - For the 25th the 3m JPY Libor prices only a 6.65bps cut at to the key rate at 100% and on the same date the 3m euroyen August future prices only a 5.5bps cut at 100%. Though the further dated September 3m euroyen future prices a 9bps cut a 100% - likely a function of the market betting on more action being done in the september meeting (which makes sense).
BOJ HIt: Buy USDJPY @Market price; 107-111tp - up to 700pips
1. A BOJ Hit can be considered as double or more the median expectations (in my opinion) - 20bps+ to the depo, 20bps+ to the LSP, Yen20trn+ to the JGB Purchases and 100-200% extra annual ETF purcases from Yen3.3trn to 6.6/9.9trn. Yen20-30trn Fiscal stimulus.
- The package above or more IMO will allow $yen to trade to 111, and for a sustained amount of time.
- The long USDJPY is the best proxy to play the "over-delivery" imo as USD is the most stable base, and has the most pips to gain on yen weakness - given FOMC hawkishness/ Hiking expectations give USDJPY topside even more impetus.
- As above, the markets currently DON'T expect this result, as $Yen trades at the 104 level and rates markets price only 5-6bps of lowering. HOWEVER, if BOJ/ JPY Govt are to deliver a big easing package - one that smashes expectations (such as the one above) it will be now. The reason I think this is the case is below:
USDJPY/ SPX: NET RISK APPETITE - THE REVERSAL OR INTERDAY TREND?- As many of you know ive been tracking/ am keen on this whole macro "net risk sentiment" theme to gauge what direction markets are heading in for the day/ week/ several weeks.
- We started today as planned, with both safe havens and risk asset relatively flat, before risk-on sentiment dominated early trading with yen breaking out the 107 level and equity indexes holding their gains/ in the green.
- However, at apprx 10am GMT BBC Radio 4 reiterated the 3wk old sentiments from BOJ govenor Kuroda, which downplayed the chance of helicopter money/ took a hawkish tone - which in turn then shifted markets into a mildly strong risk-off rally, with yen falling 150pips straight down and equities failing to hold in the green.
Where do we go from here:
1. The easiest thought, with Yen up 1% and gold up 1% is to think "the risk rally/ recovery is materially over, we should start positioning for the material risk-off downtrend that has dominated 2016 and get net short safe havens again" however by steeping away from the fundamental intraday signs for a moment/ looking at the technicals from a macro perspective, there is a promising underlying trend that has developed this past 2wks (since the risk rally began) which MAY mean this is NOT the case.
2. Firstly look at the daily of USDJPY below (my favourite Safe haven indicator of risk sentiment given FX being the fastest asset to process information) and SPX above (my favourite risk-on indicator of risk sentiment due to its nobility) - what do you notice?
- For the past 9 trading days (since the risk-recovery started) SPX has traded one day higher, then one day lower EVERYDAY and today seems to be no exception - we are on the lower day. 9-days is particularly enough to be certain but it is definitely something worth thinking about when considering if this is the doom and gloom end of the risk rally or merely an interday correction that the market has been happy with since the rally started.
- Correlation at 97% confirms this view - and high correlations are usually markers of a trend (e.g. one up one down) and harder to break so i definitely think this could be an interday trend lower for risk (before resuming higher again tomorrow) - rather than a risk-off reversal.
BOJ Kuroda's reiterated comments:
1. Kurodas reiterated comments today from 3wks ago was certainly the driver for the aggressive sell-off however, we have since moved 50-70pips higher than them levels so there is definitely something more macro at play as to why risk is struggling today e.g. the one day trend that has held.
Going forward:
1. It will be interesting to see if that pattern continues to hold true e.g. tomorrow is a risk-on day. Though the odds are against it with friday historically being the WORST day for stocks due to end of week book clearing - so before making any moves on Friday it may be even best to wait until Monday to decide if the risk-off sentiment is here to stay before switching your trading sentiment (as i said last weekend) - unless we were to see some aggressive selling off tomorrow e.g. UJ to <104 - this to me would confirm that the risk rally was over and I would turn a net seller of USDJPY and cut my risk holdings
- It seems weird that the ECB dovishness was enough to send EUR$ lower (never happens) but not enough to give risk a prop up - so it could well be that the macro trend of 1 up/ 1 down on the daily takes precedent no matter what + the BBC R4 Spat with kurodas comments earlier was just an emphasiser of the already established marco pattern?
- Time will tell.
XAUUSD VOLUME & OPEN INTEREST, FULL(NOT ON CHART LIST IN TEXT)THIS REPORT IS IN TEXT ONLY. CHART DATA CONSISTS OF SESSION LEVELS COUNTED EARLIER, I HAVE PREPARED AN OPTION LEVELS TO SHARE WITH YOU, THAT CAN BE USED TO FILTER OUT LEVELS THAT YOU ARE USING IN YOUR ANALYSIS
Volume Put / Open Interest Put / Level
0 / 1527 / 949.90
0 / 980 / 969.90
0 / 1332 / 999.90
0 / 1735 / 1049.90
0 / 3101 / 1059.90
0 / 962 / 1074.90
0 / 844 / 1089.90
0 / 2832 / 1099.90
0 / 1580 / 1109.90
0 / 1064 / 1114.90
0 / 1290 / 1119.90
0 / 1977 / 1124.90
0 / 1018 / 1129.90
0 / 918 / 1134.90
0 / 3346 / 1149.90
0 / 1364 / 1154.90
0 / 1729 / 1174.90
0 / 1116 / 1179.90
0 / 915 / 1184.90
0 / 1522 / 1189.90
1 / 8795 / 1199.90
0 / 1111 / 1214.90
0 / 2349 / 1219.90
1 / 2831 / 1224.90
0 / 3040 / 1229.90
0 / 3150 / 1239.90
2 / 3271 / 1249.90
0 / 1658 / 1254.90
2 / 3043 / 1259.90
397 / 2113 / 1269.80
216 / 3236 / 1274.80
225 / 1636 / 1279.70
50 / 1053 / 1284.60
79 / 1751 / 1289.50
674 / 1223 / 1294.20
799 / 4990 / 1298.90
358 / 1651 / 1303.50
251 / 1370 / 1307.60
153 / 1331 / 1311.30
256 / 1728 / 1314.60
262 / 2521 / 1317.30
54 / 2574 / 1319.20
66 / 1363 / 1321.70
2 / 1125 / 1322.70
Volume Call / Open interest Call / Level
0 / 950 / 1323.40
0 / 1132 / 1323.40
0 / 2944 / 1323.40
0 / 1671 / 1323.40
1 / 1254 / 1323.40
1 / 3394 / 1323.50
0 / 1857 / 1323.50
0 / 1025 / 1323.50
0 / 1383 / 1323.60
0 / 3110 / 1323.60
1 / 1010 / 1323.70
0 / 1309 / 1323.80
9 / 5597 / 1324.50
179 / 1199 / 1328.80
889 / 2619 / 1331.10
589 / 3195 / 1334.20
347 / 1174 / 1337.70
304 / 1271 / 1341.70
168 / 831 / 1346.10
554 / 4378 / 1350.70
23 / 889 / 1355.40
33 / 3633 / 1360.30
14 / 1210 / 1365.30
9 / 1265 / 1370.20
161 / 2048 / 1375.20
10 / 1594 / 1380.20
6 / 1223 / 1390.10
11 / 834 / 1395.10
63 / 7930 / 1400.10
0 / 1454 / 1410.10
0 / 1618 / 1420.10
2 / 1062 / 1425.10
1 / 1366 / 1430.10
0 / 3281 / 1450.10
0 / 3086 / 1460.10
0 / 1426 / 1475.10
0 / 1459 / 1500.10
0 / 2186 / 1550.10
0 / 901 / 1600.10
USDMXN VOLUME & OPEN INTEREST, FULL(NOT ON CHART LIST IN TEXT)THIS REPORT IS IN TEXT ONLY. CHART DATA CONSISTS OF SESSION LEVELS COUNTED EARLIER, I HAVE PREPARED AN OPTION LEVELS TO SHARE WITH YOU, THAT CAN BE USED TO FILTER OUT LEVELS THAT YOU ARE USING IN YOUR ANALYSIS
Volume Put / Open Interest Put / Level
0 / 10 / 20.00000
0 / 27 / 19.04762
0 / 81 / 18.86792
0 / 40 / 18.69158
0 / 10 / 18.34861
Volume Call / Open interest Call / Level
0 / 20 / 19.41750
0 / 20 / 19.23079
0 / 1 / 19.04763
0 / 10 / 18.86793
0 / 77 / 18.69160
0 / 44 / 18.51852
0 / 40 / 18.34863
0 / 2 / 18.18182
0 / 30 / 18.01802
0 / 150 / 17.09402
USDJPY VOLUME & OPEN INTEREST, FULL(NOT ON CHART LIST IN TEXT)THIS REPORT IS IN TEXT ONLY. CHART DATA CONSISTS OF SESSION LEVELS COUNTED EARLIER, I HAVE PREPARED AN OPTION LEVELS TO SHARE WITH YOU, THAT CAN BE USED TO FILTER OUT LEVELS THAT YOU ARE USING IN YOUR ANALYSIS
Volume Put / Open Interest Put / Level
1 / 1906 / 120.481
0 / 231 / 119.759
0 / 117 / 119.047
0 / 351 / 118.342
0 / 232 / 117.646
0 / 117 / 116.957
0 / 338 / 116.277
20 / 218 / 115.603
23 / 288 / 114.938
26 / 276 / 114.280
13 / 380 / 113.628
20 / 438 / 112.984
0 / 428 / 112.346
10 / 846 / 111.714
158 / 944 / 111.088
47 / 708 / 110.468
292 / 741 / 109.853
1 / 1343 / 109.243
103 / 1032 / 108.638
113 / 1394 / 108.036
68 / 961 / 107.439
212 / 1719 / 106.845
70 / 1295 / 106.254
96 / 1282 / 105.666
86 / 3010 / 94.819
13 / 1185 / 95.288
9 / 2733 / 95.755
2 / 927 / 96.220
0 / 881 / 96.682
0 / 1145 / 97.143
0 / 1930 / 97.601
40 / 632 / 98.058
0 / 1579 / 98.514
0 / 110 / 98.969
Volume Call / Open interest Call / Level
0 / 301 / 108.996
0 / 614 / 108.371
16 / 304 / 107.757
0 / 378 / 107.151
32 / 850 / 106.554
185 / 633 / 105.965
97 / 1183 / 105.386
960 / 782 / 104.815
55 / 1723 / 104.253
14 / 1100 / 103.699
6 / 1536 / 103.152
250 / 1186 / 102.613
5 / 1392 / 102.081
224 / 905 / 101.556
4 / 2190 / 101.037
14 / 684 / 100.525
15 / 1555 / 100.018
10 / 388 / 99.517
31 / 1614 / 99.022
10 / 623 / 98.532
42 / 922 / 98.047
3 / 953 / 97.568
35 / 1080 / 97.093
15 / 1663 / 96.623
11 / 467 / 96.158
0 / 616 / 95.697
0 / 804 / 95.241
0 / 297 / 94.789
13 / 328 / 94.342
0 / 409 / 93.899
1 / 253 / 93.460
0 / 250 / 93.025
0 / 349 / 92.594
0 / 443 / 90.910
0 / 235 / 90.091
0 / 539 / 86.957
1 / 1600 / 86.580
USDCHF VOLUME & OPEN INTEREST, FULL(NOT ON CHART LIST IN TEXT)THIS REPORT IS IN TEXT ONLY. CHART DATA CONSISTS OF SESSION LEVELS COUNTED EARLIER, I HAVE PREPARED AN OPTION LEVELS TO SHARE WITH YOU, THAT CAN BE USED TO FILTER OUT LEVELS THAT YOU ARE USING IN YOUR ANALYSIS
Volume Put / Open Interest Put / Level
0 / 1 / 1.03627
0 / 114 / 1.01523
0 / 1 / 1.01010
0 / 5 / 1.00502
0 / 115 / 0.99998
0 / 10 / 0.99500
30 / 278 / 0.99006
29 / 32 / 0.98515
0 / 66 / 0.98030
0 / 79 / 0.97548
0 / 101 / 0.97070
0 / 26 / 0.96597
0 / 30 / 0.96128
0 / 20 / 0.95663
0 / 20 / 0.93402
Volume Call / Open interest Call / Level
29 / 24 / 0.98528
5 / 111 / 0.98044
0 / 80 / 0.97564
0 / 110 / 0.97089
0 / 35 / 0.96620
0 / 21 / 0.96155
0 / 65 / 0.95694
0 / 79 / 0.95239
0 / 5 / 0.94787
0 / 59 / 0.94340
0 / 20 / 0.93897
0 / 6 / 0.93458
0 / 3 / 0.93023
0 / 6 / 0.92593
0 / 26 / 0.92166
0 / 10 / 0.91743
0 / 5 / 0.91324
0 / 11 / 0.90909
0 / 10 / 0.88889
0 / 10 / 0.86580
0 / 5 / 0.85837
0 / 5 / 0.85470
0 / 5 / 0.84746
0 / 5 / 0.84388
0 / 5 / 0.84034
USDCAD VOLUME & OPEN INTEREST, FULL(NOT ON CHART LIST IN TEXT)THIS REPORT IS IN TEXT ONLY. CHART DATA CONSISTS OF SESSION LEVELS COUNTED EARLIER, I HAVE PREPARED AN OPTION LEVELS TO SHARE WITH YOU, THAT CAN BE USED TO FILTER OUT LEVELS THAT YOU ARE USING IN YOUR ANALYSIS
Volume Put / Open Interest Put / Level
0 / 8 / 1.44928
0 / 20 / 1.43885
0 / 4500 / 1.41844
0 / 43 / 1.40845
0 / 91 / 1.39860
2 / 251 / 1.38889
3 / 387 / 1.37931
3 / 1413 / 1.36986
9 / 323 / 1.36054
268 / 1009 / 1.35134
15 / 472 / 1.34227
407 / 2131 / 1.33331
106 / 842 / 1.32447
323 / 1070 / 1.31573
52 / 1197 / 1.30710
0 / 790 / 1.29858
5 / 551 / 1.29017
3 / 223 / 1.28185
0 / 185 / 1.27364
0 / 301 / 1.26553
0 / 28 / 1.25752
0 / 4 / 1.24179
Volume Call / Open interest Call / Level
48 / 48 / 1.32460
142 / 102 / 1.31585
396 / 437 / 1.30723
198 / 981 / 1.29873
98 / 1519 / 1.29034
70 / 1531 / 1.28206
3 / 1180 / 1.27389
47 / 675 / 1.26583
5 / 573 / 1.25786
0 / 694 / 1.25000
1 / 324 / 1.24224
0 / 320 / 1.23457
0 / 260 / 1.22699
0 / 76 / 1.21951
0 / 50 / 1.21212
0 / 48 / 1.20482
0 / 7 / 1.19760
0 / 1 / 1.19048
0 / 4 / 1.18343
0 / 7 / 1.17647
0 / 24 / 1.16959
0 / 26 / 1.16279
0 / 17 / 1.14943
0 / 6 / 1.14286
0 / 4 / 1.13636
0 / 15 / 1.12360
GBPUSD VOLUME & OPEN INTEREST, FULL(NOT ON CHART LIST IN TEXT)THIS REPORT IS IN TEXT ONLY. CHART DATA CONSISTS OF SESSION LEVELS COUNTED EARLIER, I HAVE PREPARED AN OPTION LEVELS TO SHARE WITH YOU, THAT CAN BE USED TO FILTER OUT LEVELS THAT YOU ARE USING IN YOUR ANALYSIS
Volume Call / Open interest Call / Level
8 / 628 / 1.31850
0 / 1257 / 1.32010
1 / 499 / 1.32200
1 / 545 / 1.32410
1 / 1125 / 1.32650
10 / 1106 / 1.32910
0 / 1655 / 1.33190
1 / 924 / 1.33500
425 / 948 / 1.33820
275 / 608 / 1.34170
82 / 2008 / 1.34540
16 / 768 / 1.34930
64 / 1876 / 1.35340
62 / 747 / 1.35760
212 / 1208 / 1.36210
23 / 764 / 1.36660
122 / 499 / 1.37120
120 / 303 / 1.37600
16 / 450 / 1.38080
33 / 901 / 1.38560
191 / 561 / 1.40030
1 / 268 / 1.40530
0 / 308 / 1.41020
0 / 326 / 1.41520
0 / 245 / 1.44010
0 / 277 / 1.45000
0 / 242 / 1.48000
0 / 308 / 1.49000
0 / 335 / 1.49500
0 / 263 / 1.50000
0 / 205 / 1.51000
0 / 225 / 1.52000
0 / 213 / 1.54000
EURUSD VOLUME & OPEN INTEREST,FULL (NOT ON CHART - LIST IN TEXT)Volume Put / Open Interest Put / Level
0 / 332 / 0.95500
0 / 205 / 1.00000
0 / 218 / 1.01000
0 / 237 / 1.01500
0 / 245 / 1.01995
0 / 232 / 1.02495
0 / 320 / 1.02995
3 / 256 / 1.03490
1 / 2387 / 1.03990
222 / 343 / 1.04485
15 / 2892 / 1.04980
16 / 649 / 1.05475
18 / 758 / 1.05960
1 / 1094 / 1.06440
129 / 1176 / 1.06910
214 / 2338 / 1.07370
290 / 3063 / 1.07800
389 / 3224 / 1.08200
401 / 7166 / 1.08560
954 / 3950 / 1.08890
592 / 4270 / 1.09160
276 / 3163 / 1.09370
128 / 2981 / 1.09530
78 / 1531 / 1.09650
0 / 1867 / 1.09730
7 / 1225 / 1.09780
5 / 1091 / 1.09810
0 / 722 / 1.09830
0 / 463 / 1.09840
0 / 391 / 1.09850
0 / 184 / 1.09850
Volume Call / Open interest Call / Level
0 / 139 / 1.10160
163 / 168 / 1.10480
706 / 806 / 1.10710
579 / 1901 / 1.11000
369 / 1919 / 1.11340
1499 / 2712 / 1.11720
430 / 3949 / 1.12140
330 / 3191 / 1.12590
131 / 3662 / 1.13050
637 / 2753 / 1.13535
48 / 3229 / 1.14025
12 / 2240 / 1.14515
164 / 3085 / 1.15010
0 / 808 / 1.15510
0 / 1144 / 1.16005
0 / 570 / 1.16505
2 / 808 / 1.17005
0 / 679 / 1.17500
0 / 792 / 1.18000
0 / 657 / 1.18500
1 / 578 / 1.19000
0 / 258 / 1.19500
0 / 163 / 1.20000
0 / 102 / 1.20500
0 / 942 / 1.21000
0 / 448 / 1.21500
0 / 266 / 1.22000
0 / 134 / 1.22500
0 / 250 / 1.25500
AUDUSD UPDATE VOLUME & OPEN INTEREST, (NOT ON CHART - LIST)THIS REPORT IS IN TEXT ONLY. CHART DATA CONSISTS OF SESSION LEVELS COUNTED EARLIER, I HAVE PREPARED AN OPTION LEVELS TO SHARE WITH YOU, THAT CAN BE USED TO FILTER OUT LEVELS THAT YOU ARE USING IN YOUR ANALYSIS
Volume Put / Open Interest Put / Level
0 / 2 / 0.59000
0 / 20 / 0.61000
0 / 2 / 0.62500
0 / 25 / 0.63000
0 / 1003 / 0.63500
0 / 129 / 0.64000
0 / 2 / 0.64500
0 / 87 / 0.65000
0 / 24 / 0.65500
0 / 22 / 0.66000
0 / 46 / 0.66500
0 / 59 / 0.66995
0 / 42 / 0.67495
0 / 178 / 0.67995
0 / 155 / 0.68490
0 / 130 / 0.68990
0 / 134 / 0.69485
0 / 567 / 0.69980
11 / 195 / 0.70475
44 / 1262 / 0.70960
31 / 531 / 0.71440
230 / 682 / 0.71910
78 / 766 / 0.72350
244 / 935 / 0.72770
47 / 798 / 0.73150
21 / 644 / 0.73490
63 / 1536 / 0.73780
35 / 724 / 0.74010
20 / 297 / 0.74190
3 / 208 / 0.74310
3 / 41 / 0.74390
0 / 24 / 0.74440
0 / 20 / 0.74470
Volume Call / Open interest Call / Level
0 / 10 / 0.74540
0 / 3 / 0.74540
0 / 32 / 0.74560
0 / 143 / 0.74580
0 / 194 / 0.74610
30 / 103 / 0.74670
0 / 141 / 0.74750
0 / 181 / 0.74870
11 / 297 / 0.75030
29 / 1367 / 0.75240
57 / 437 / 0.75510
47 / 991 / 0.75830
39 / 759 / 0.76210
36 / 915 / 0.76630
18 / 710 / 0.77080
123 / 901 / 0.77550
137 / 666 / 0.78030
62 / 387 / 0.78520
12 / 643 / 0.79015
0 / 276 / 0.79510
0 / 77 / 0.80005
0 / 68 / 0.80505
0 / 34 / 0.81000
0 / 78 / 0.81500
0 / 2 / 0.82000
0 / 7 / 0.82500
0 / 3 / 0.83000
0 / 11 / 0.83500
0 / 25 / 0.84000
SHORT EURUSD: ECB POLICY DECISION & DRAGHI SPEECH HIGHLIGHTSIMO Draghi was dovish on the margin as expected - once again reiterating the ECB commitment to targets with " If Warranted, Will Act By Using All Available Instruments". Further, he was very pessimistic on many fronts, especially the ECBs key target inflation saying "Inflation Rates Likely to Remain Very Low In Next Few Months" and " Risks to Growth Outlook Remain Tilted to Downside".
All in all this reaffirms my bearish EUR view and supports my medium term short EURUSD traded posted last weekend. Going forward, if low inflation persists the ECB has made it quite clear that it will take action "using all policy tools available", such a statement is very dovish/ bearish.
In the broader view, Draghis dovishness should support risk markets today and help then shrug off the losses they made on the back of the Kuroda misinformation that repeated quotes from 3wks ago - which the market took as new hawkishness from the BOJ Governor.
My favourite nearterm trade now is seeing USDJPY trading back to 107 by 5pm GMT thus holding my bullish view of the risk recovery taking us to 107, then 109 then 111/112 before reversing over the next few weeks. And I expect stock indexes to outperform safe havens on the day (where both trade flat now after safe havens initially pulling away post kurodas reiterated comments/ error from BBCR4).
ECB Chair Mario Draghi Speech Highlights:
-Draghi: Policy Measures Since June 2014 Have Significantly Improved Borrowing Conditions
-Draghi: Financing Conditions Remain Highly Supportive
-Draghi: Will Be in Better Position to Reassess in Coming Months
-Draghi: If Warranted, Will Act By Using All Available Instruments
-Draghi: Data Point to Ongoing Growth in Q2, Though Perhaps Lower Pace Than Q1
-Draghi: Fiscal Stance in Euro Area Expected to Be Mildly Expansionary in 2016
-Draghi: Headwinds to Recovery Include Brexit Referendum Outcome
-Draghi: Risks to Growth Outlook Remain Tilted to Downside
-Draghi: Inflation Rates Likely to Remain Very Low In Next Few Months
-Draghi: Inflation Rates Should Increase Further in 2017, 2018
-Draghi: Essential That Bank Lending Channel Continues to Function Well
-Draghi: Growth Supported by Domestic Demand
-Draghi: Implementation of Structural Reforms Needs to be Stepped Up
-Draghi: Council Concluded that We Didn't Have Information to Take Decisions
-Draghi: Brexit Didn't Seem to Have Major Impact on Inflation Outlook
-Draghi: Need More Time to Assess State of Market-Based Inflation Expectations
-Draghi: If Warranted, Council Will Act By Using All Instruments in Mandate 2016.
-Draghi: Should Take Brexit Impact Estimates With Caution
-Draghi: Markets, Banking Sector Have Reacted in Fairly Resilient Fashion to Brexit
-Draghi: We View Our QE Program, TLTRO Program As Quite Successful
-Draghi: Past Evidence Shows Our Ability to Adapt Programs
-Draghi: Have Not Discussed Tapering
-Draghi: Very Important that Message of Stability Come out of G20, Given Uncertainties
-Draghi: Very Difficult to Foresee Significant Impact of Turkey Unrest on Eurozone in Immediate Future
-Draghi: Very Difficult to Understand How Geopolitical Uncertainties Affect Eurozone
-Draghi: We See Inflation Moving Forward According to Baseline Scenario
-Draghi: No Attention Given to Discuss Specific Instruments
-Draghi: Bank Equity Prices of Some Significance for Policy Makers
-Draghi: Problem Now Is Weak Bank Profitability Not Solvency
-Draghi: Events in Turkey Could Undermine Confidence
-Draghi: On Solvency Side, Our Banks Are Better Than Before
-Draghi: Problem Now Is Weak Bank Profitability Not Solvency
-Draghi: Monetary Policy Measures Undertaken When Many Headwinds In Place
-Draghi: There's An Interest in Solving Problem Quickly, But Problem By Nature Slow to Resolve
ECB Monetary Policy Decision - Unchanged as expected:
- ECB MAIN REFI RATE UNCHANGED AT 0%
- DEPOSIT FACILITY RATE AT -0.40%
- MARGINAL LENDING RATE UNCHANGED AT 0.25%
- ECB ASSET PURCHASE T
XAUUSD NEW VOLUME & OPEN INTEREST, DATA (NOT ON CHART - TEXT)THIS REPORT IS IN TEXT ONLY. CHART DATA CONSISTS OF SESSION LEVELS COUNTED EARLIER, I HAVE PREPARED AN OPTION LEVELS TO SHARE WITH YOU, THAT CAN BE USED TO FILTER OUT LEVELS THAT YOU ARE USING IN YOUR ANALYSIS
Volume Put / Open Interest Put / Level
0 / 1527 / 949.90
0 / 980 / 969.90
0 / 1332 / 999.90
0 / 1735 / 1049.90
0 / 3101 / 1059.90
0 / 962 / 1074.90
0 / 844 / 1089.90
5 / 2837 / 1099.90
0 / 1580 / 1109.90
0 / 1064 / 1114.90
0 / 1290 / 1119.90
0 / 1977 / 1124.90
1 / 1019 / 1129.90
1 / 919 / 1134.90
0 / 3346 / 1149.90
0 / 1364 / 1154.90
0 / 1729 / 1174.90
10 / 1117 / 1179.90
0 / 915 / 1184.90
0 / 1522 / 1189.90
2 / 8798 / 1199.90
5 / 1111 / 1214.90
6 / 2354 / 1219.90
27 / 2832 / 1224.90
25 / 3015 / 1229.90
2 / 3152 / 1239.90
174 / 3462 / 1249.80
11 / 1658 / 1254.80
111 / 3049 / 1259.70
261 / 2245 / 1269.60
1228 / 3180 / 1274.40
266 / 1650 / 1279.20
257 / 1008 / 1283.80
310 / 1751 / 1288.40
684 / 1056 / 1292.70
2685 / 5163 / 1296.80
186 / 1616 / 1300.70
1057 / 939 / 1307.40
257 / 1859 / 1310.20
110 / 2639 / 1312.40
298 / 2799 / 1314.20
116 / 1400 / 1316.60
222 / 1164 / 1318.00
Volume Call / Open interest Call / Level
0 / 950 / 1319.30
0 / 1132 / 1319.30
0 / 2944 / 1319.30
0 / 1671 / 1319.40
0 / 1254 / 1319.40
1 / 3395 / 1319.50
0 / 1857 / 1319.50
1 / 1025 / 1319.60
2 / 1384 / 1319.70
11 / 3282 / 1319.90
8 / 1014 / 1320.10
25 / 1309 / 1320.50
535 / 6055 / 1322.50
384 / 1188 / 1329.10
713 / 2838 / 1331.90
543 / 3464 / 1335.10
767 / 1173 / 1342.70
368 / 837 / 1346.90
906 / 4786 / 1351.30
111 / 823 / 1355.90
126 / 3654 / 1360.70
51 / 1248 / 1365.50
407 / 1168 / 1370.40
47 / 2134 / 1375.30
48 / 1677 / 1380.20
213 / 1206 / 1390.10
6 / 837 / 1395.10
278 / 7783 / 1400.10
1 / 1455 / 1410.10
5 / 1618 / 1420.10
65 / 1062 / 1425.10
3 / 1369 / 1430.10
0 / 3281 / 1450.10
0 / 3086 / 1460.10
0 / 1426 / 1475.10
0 / 1459 / 1500.10
0 / 2186 / 1550.10
1 / 901 / 1600.10
USDMXN NEW VOLUME & OPEN INTEREST, DATA (NOT ON CHART - TEXT)THIS REPORT IS IN TEXT ONLY. CHART DATA CONSISTS OF SESSION LEVELS COUNTED EARLIER, I HAVE PREPARED AN OPTION LEVELS TO SHARE WITH YOU, THAT CAN BE USED TO FILTER OUT LEVELS THAT YOU ARE USING IN YOUR ANALYSIS
Volume Put / Open Interest Put / Level
0 / 10 / 20.00000
0 / 27 / 19.04762
0 / 81 / 18.86792
0 / 40 / 18.69158
0 / 10 / 18.34861
Volume Call / Open interest Call / Level
0 / 20 / 19.41750
0 / 20 / 19.23078
0 / 1 / 19.04763
0 / 10 / 18.86793
1 / 77 / 18.69159
0 / 44 / 18.51852
0 / 40 / 18.34863
0 / 2 / 18.18182
0 / 30 / 18.01802
0 / 150 / 17.09402
USDJPY NEW VOLUME & OPEN INTEREST, DATA (NOT ON CHART - TEXT)THIS REPORT IS IN TEXT ONLY. CHART DATA CONSISTS OF SESSION LEVELS COUNTED EARLIER, I HAVE PREPARED AN OPTION LEVELS TO SHARE WITH YOU, THAT CAN BE USED TO FILTER OUT LEVELS THAT YOU ARE USING IN YOUR ANALYSIS
Volume Put / Open Interest Put / Level
14 / 1891 / 120.481
0 / 116 / 119.046
64 / 351 / 118.341
32 / 234 / 117.645
12 / 115 / 116.956
3 / 329 / 116.275
0 / 132 / 115.601
0 / 284 / 114.935
0 / 276 / 114.276
5 / 271 / 113.623
50 / 363 / 112.977
25 / 404 / 112.338
30 / 792 / 111.704
78 / 783 / 111.076
128 / 844 / 110.453
28 / 734 / 109.836
577 / 1475 / 109.223
58 / 1045 / 108.614
196 / 1427 / 108.009
319 / 991 / 107.408
806 / 1884 / 106.811
434 / 1291 / 106.217
80 / 1283 / 105.626
5 / 3017 / 94.775
514 / 1417 / 95.242
19 / 2760 / 95.706
0 / 914 / 96.169
1 / 882 / 96.629
0 / 1145 / 97.088
0 / 1930 / 97.545
0 / 632 / 98.001
0 / 1579 / 98.456
2 / 110 / 98.910
Volume Call / Open interest Call / Level
0 / 301 / 108.957
0 / 604 / 108.336
11 / 304 / 107.725
163 / 727 / 106.528
3 / 659 / 105.943
57 / 1211 / 105.367
18 / 617 / 104.799
231 / 1650 / 104.240
141 / 907 / 103.687
192 / 1319 / 103.143
215 / 838 / 102.605
277 / 1185 / 102.075
137 / 832 / 101.551
95 / 2008 / 101.033
1 / 682 / 100.522
42 / 1534 / 100.016
1 / 389 / 99.515
0 / 1604 / 99.021
10 / 603 / 98.531
7 / 915 / 98.047
40 / 929 / 97.568
12 / 1078 / 97.093
0 / 1663 / 96.623
0 / 466 / 96.158
0 / 616 / 95.698
0 / 804 / 95.242
1 / 298 / 94.790
0 / 328 / 94.343
11 / 409 / 93.899
0 / 253 / 93.460
0 / 250 / 93.025
0 / 349 / 92.595
1 / 444 / 90.911
0 / 235 / 90.091
0 / 539 / 86.957
0 / 1600 / 86.581
USDCHF NEW VOLUME & OPEN INTEREST, DATA (NOT ON CHART - TEXT)THIS REPORT IS IN TEXT ONLY. CHART DATA CONSISTS OF SESSION LEVELS COUNTED EARLIER, I HAVE PREPARED AN OPTION LEVELS TO SHARE WITH YOU, THAT CAN BE USED TO FILTER OUT LEVELS THAT YOU ARE USING IN YOUR ANALYSIS
Volume Put / Open Interest Put / Level
0 / 1 / 1.03627
0 / 114 / 1.01522
0 / 1 / 1.01010
0 / 115 / 0.99998
0 / 10 / 0.99500
0 / 278 / 0.99005
5 / 32 / 0.98515
0 / 66 / 0.98030
0 / 79 / 0.97548
0 / 101 / 0.97071
0 / 26 / 0.96597
0 / 30 / 0.96128
0 / 20 / 0.95664
0 / 20 / 0.93404
Volume Call / Open interest Call / Level
0 / 24 / 0.98530
0 / 111 / 0.98045
0 / 80 / 0.97565
0 / 110 / 0.97090
0 / 35 / 0.96620
0 / 21 / 0.96155
0 / 65 / 0.95695
0 / 79 / 0.95239
0 / 5 / 0.94787
0 / 59 / 0.94340
0 / 20 / 0.93897
0 / 6 / 0.93458
0 / 3 / 0.93023
0 / 6 / 0.92593
0 / 26 / 0.92166
0 / 10 / 0.91743
0 / 5 / 0.91324
0 / 11 / 0.90909
0 / 10 / 0.88889
0 / 10 / 0.86580
0 / 5 / 0.85837
0 / 5 / 0.85470
0 / 5 / 0.84746
0 / 5 / 0.84388
0 / 5 / 0.84034
USDJPY: LONG UPDATE - RENEWED JPY FISCAL STIMULUS SPECULATION?I posted earlier with my 107 USDJPY breakout trade (see attached post) - one of the reasons I said to long USDJPY on the 107 break-out was due to JPY Govt stimulus speculation.
In the last few hours we have seen fresh speculation of the JPY stimulus, with JPY20trn now being discussed/ proposed to be on the table - this renewed rhetoric is nothing but positive for the 107 breakout long trade i posted a few hours ago and supports it as YEN20trn is approximately $200bn, which is certainly enough new liquidity to give confidence to markets and spur risk markets onto fresh highs - further this JPY Govt stimulus is speculated to be combined WITH BOJ easing, so markets get a compounded risk rally since there are two potential drivers (BOJ cut rates by 10-20bps + add to maturity/ purchases of JGB and EFT).
Plus today after seeing the RBNZ's dovish economic assessment (where an Aug cut is almost 100%), this gives risk markets even more fuel thus encouraging $yen to trade to the 109-111 levels i expect - though BOE K. Forbes hawkish comments negate some of this.
The new JPY Fiscal stimulus speculation:
1. JAPANESE GOVERNMENT CONSIDERING 20 TRILLION YEN STIMULUS PACKAGE SAYS KYODO - "The government initially envisaged compiling a stimulus package of somewhat more than 10 trillion yen . But the size is likely to double as the package will now include projects for fiscal 2017 and beyond and increase "zaito" low-interest government loans by 6 trillion yen," Kyodo reports.
2. "The government initially envisaged compiling a stimulus package of somewhat more than 10 trillion yen . But the size is likely to double as the package will now include projects for fiscal 2017 and beyond and increase "zaito" low-interest government loans by 6 trillion yen," Kyodo reports.
3. "The stimulus could be even larger, they report. And able will look for the rubber stamp from the Cabinet in early August. About half will be earmarked for infrastructure."
Trading strategy going forward:
1. Trading strategy remains the same from the 107 breakout post that i made earlier e.g. 109TP1, 111TP2 - all that has changed from the post before is that the strategy has been reaffirmed/ strengthened upon this renewed JPY stimulus speculation , given this was one of the drivers i cited to move USDJPY to the 109 then 111 level once the 107 confirmation level was broken.
- In early asia trading, as yesterday, net risk sentment remains stable with safe havens gold, yen and bonds down as well as risk, though risk down slightly less. For the day, I expect risk-on sentiment to win as Thursday historically is the best day for stocks (before going into the friday end of week sell-off) + post market Wednesday some large firms posted outperforming earnings which should continue helping the risk appetite move higher (Intel + Morgan stanley beating EPS and revenue forecasts) when the main LDN and NY sessions get underway down the line.
*Check the "USDJPY: BUY THE BREAKOUT" post attached for more details on the trade discussed above posted 7 hours ago*
