Markets closing down for 2019 right on time for the 3254 target, focus is now shifting towards event risk positioning into 2020 and participants seem happy to play the reflationary trades. This is an interesting swing to track with US election flows providing the ebb and flow. The flows will now reflect in a lagged currency move with the Year-End repo...
With Trump Administration desperately attempting to add momentum to the $ downside via another Fed cut and pressure on ECB, combined with a convergence in US-EU differentials will lead to a long-term rebound in EUR. I am expecting volatility to expand into year-end after completing the 76.4% retracement. For those tracking the USD long-term chart from last...
An end of year update for US Equities with valuation targets at 3240/54 I am tracking for an overshoot into the 3200 handle to sell into. For those tracking the current flows, the most important chart I have been showing to all clients is the 2s 5s curve: The major top in USD will help for a few months at most, as soon as we enter into the next chapter in the...
With the year almost up, a good time to update the USDTRY chart. Smart money has been tracking Turkish rates, the short end has been screaming weakness and markets not interest in any more BS with the dictator in charge. S400 remains a thorn in the shoe and blackmailing to close NATO bases is leaving a nasty aftertaste. For those who have been tracking the...
Here we can see price risks are still skewed to the topside, with CB's buying Gold at a rate unseen since the Nixon era meaning Silver will continue to move as collateral. Prices have trended in the same direction over the past 4 waves, the market appears to be underpricing the odds of future demand risks as well as a meaningful pick-up in risk due to completions...
Uncertainty around reflationary fears will add upside risks to prices in Gold for 1H20. Gold remains bid since the start of November, despite risky assets continuing to gain ground. CB's have been buying 20% of the Gold supplies, the same rate circa Nixon era, all whilst mainstream media paints the geopolitical landscape with a more constructive backdrop, any...
Lets get started... On the macro side, RBA expected to cut once more in Feb to 0.5% and the rate cycle is already over. If data continues to improve and follow the solid unemployment prints we saw last week, then they will have missed the boat to cut once more as income tax cut later in the year. This will be enough to keep AUD in bid over 2020 and 2021 with a...
Very little to update on EUR with flows on both sides clashing and causing minor chop inside the 1.11xx handle. Better numbers than expected from Germany this morning providing a gift for those adding on dips. A quick review of the two positions we have traded live so far with the infamous "worm in the apple". A quick review of these charts: As long as...
A good time to update the Oil chart after the OPEC desperation leg. Those following the previously posted long-term macro chart will remember the breakout we have been tracking: On the demand side, manufacturing remains sluggish and we are again outguessing signs of the effects on the demand side. Equities wont be able to hold Oil up for too much longer, this...
Eyes on BTC edging lower and being supported by renewed demand interest. Losses are marginal as we creep into the 6,000 handle with expiries later in the month. Expecting BTC and other major Cryptos to ebb gently higher as we await the macroeconomic backdrop to eventually feeding through into Cryptocurrency strength; given the punitive carry, the bar for...
For those tracking the latest round of Fixed Income chart updates we have the final leg to the stool ahead right on time for NY. You will notice that on the back-end of the curve there is loud messages of a meaningful top being placed. The technical breakdown is indicating that we have another round of flattening towards key support at 32bps. For the Chartpack...
You have opened the grave of an economic cycle. Before we dig deeper into the nature and consequences of our discovery, we will discuss the background to the thesis and consider first what we know from history a few lessons; (1) Every other time this happened it ended badly for the global economy via recession. A (2) A Fed that lags and finances the Whitehouse...
This chart comes after a conversation with Citi... only 4 times in the past 30 years has the US 2's vs 5's curve inverted whilst being in an upward moving yield environment, via Fed QT. We know from history a few lessons; (1) Every other time this happened it ended badly for the global economy. (2) A Fed that lags will only add fuel to the flames .. "it's...
On the AUD side, RBA crystal clear about conditions needed for further easing and unlikely in the near-term. Unemployment overshooting may be the start of a round of good data for AUD which will keep the RBA on hold meaning markets will need to price out all of those betting on a RBA Feb rate cut. On the NZD side, RBNZ slightly hawkish surprise in the last...
A good time to map the strategy and flows for CADNOK as we approach year-end. As you will have noticed I am tracking for a major pullback in the cross over the first half in 2020, this is coming from large macro forces at play. Central bank coordination has opened up the opportunity for NOK to outperform CAD. Firstly the reflation theme via USD devaluation is...
A timely update to the previous AUDNZD weekly chart and after completing the initial selloff we are set for a major leg to the topside. Before we dig into the Fundamental and Technical side I recommend for those following to start by reviewing the previous charts to understand how and why we are trading the lows: On the AUD side, markets are pricing an RBA...
Here we go for an active NY session ahead of an important set of macro numbers for NZ this evening. I am tracking one further leg to the downside in Dollar to end the year at 96: This is a very powerful USD devaluation flow we are trading here and markets have been short NZD for most of the year; with these two things in mind I am expecting a squeeze into...
Encouraging to see life breathing back into Crypto markets with the NY open, a pick-up in corp interest as we reach the bottom of the demand zone. In house client activity picked up and notably $ outflows are impressive sizes with entrenched conviction in $ softness for the months to come. There is a serious build up of FOMO in BTC that we will see act as a...
