It's all-USD flow – we’ve seen breakouts/downs in the USDX, AUDUSD, USDJPY, NZDUSD, GBPUSD and EURUSD are a whisker away from parity. The wrecking ball that is the USD is on a war path, talk of the USD strength will be deafening in US Q2 earnings (JPM report Thursday) and some are even making contrasts with the moves seen in the USD in 1980-1985 where it rallied...
EURGBP has found some strong sellers recently, but is this a move to be faded on false optimism with Boris Johnson's resignation? Watch to find out more.
Chris and Blake are back for another episode of The Trade Off! They're talking gold, copper, Crude, FX and more while recession fears take hold.
We hope you enjoy the episode and as always, let us know your thoughts, trades and ideas in the comments!
Europe now gets the full attention – we’ve seen Germany’s trade surplus completely eroded, turning negative and into the first deficit since 1991 – clearly impacted by the reduction of Russian gas imports. Germany has been heavily reliant on Russian gas imports and the flow-on effect is we could be looking at gas rationing through the European winter and a...
In recent weeks we saw the JPY reach lows we have not seen in many years. We saw EURJPY attempt to break 144.20 three times and got rejected on all attempts hence forming a potential triple top.
Triple tops are usually big bearish reversal patterns after a long-sustained move to the upside. We saw the market close as a spinning top on the daily chart which could...
China has been performing well of late as capital flows towards the geography with the most accommodative central bank and increased liquidity. After a solid rally from the mid-May lows were seeing the HK50 print a series of lower lows and highs, although the wicks are getting longer suggesting there is still solid buying pressure into weakness. We see the price...
I think we’re seeing a turning point in the economic cycle and markets are moving to reposition for this – one where we’ve been myopically focused on inflation, to the next phase, a pure global growth focus, with inflation subsequently falling back to 4-5% range. We’re all scrambling to price recession risk and how protracted it will be and whether the result will...
We close out a miserable first half for equity investors, and there will be many hoping for better times in the second half. I am not convinced they get them just yet, although those long of Chinese equity markets have been generating some good returns, with the China CN50 index trending like a dream – I guess this comes when the economy is starting to open up and...
Chris and Blake are back for another episode of The Trade Off! The spectre of a recession is hanging over markets and our hosts look over a range of asset classes (Gold, Forex, etc) and look at macro factors that influence them.
In recent weeks we saw the JPY reach lows we have not seen in many years. We saw EURJPY attempt to break 144.20 three times and got rejected on all attempts hence forming a potential triple top.
Triple tops are usually big bearish reversal patterns after a long-sustained move to the upside. We saw the market close as a spinning top on the daily chart which could...
US real rates drive everything in markets right now, and if they are going up then so is the USD, while equity will head lower – for context, the 1-month rolling correlation (assessed by value, not percentage) between US 10-yr real rates and the USDX sits at +0.94 – so there is an incredibly strong relationship.
This is also true of equities, where the US real...
Crude is in the spotlight for many different reasons. The commodity is a key pricing input for other assets. Breakeven inflation rates are being driven significantly by the movements in crude. This obviously has feed through into rates and Fed policy settings.
The rally on Friday has been continued this week as supply and demand jostle for dominance. The G7...
Looking at client positioning it's interesting to see the CHF (Swiss franc) come up on the radar as one of the larger exposures held by clients – certainly more than usual. I suspect this is the case because the CHF is moving but we’re approaching some key levels in a number of the CHF pairs – I’d also add that there is increased discussion on the role of the CHF...
From the monthly chart, we saw cable plummet to the big 1.2000 support level and bounce off. Each time price has come to this level, buyers have stepped in aggressively, as seen back in 2016, 2017, 2019 and 2020, leading to a massive move to the upside.
On the (H4/H1) intraday timeframes, we saw price go up to 1.2400 then started pulling back, consolidating and...
Westy is back from the UK and the Trade Off is back! Markets have moved since the last three weeks, so there is a lot to unpack. Is the bottom in for risk assets or is more pain coming, and when will it reverse?
Fed Chair Jay Powell stole the limelight in his testimony to the Senate and despite all we’ve heard pricing for the July FOMC meeting hasn’t shifted – the markets expect a further 75bp of hikes. What we have seen is solid buying in the US treasury market (2yr USTs were -14bp), while commodity markets evolve to show greater signs of recessionary fears, with copper...
I see EURUSD as screening cheap on several metrics. Certainly, if I look at relative settings in the German and US bond and rates market, one could make an argument that ‘fair value' for EURUSD is above 1.1000. Germany’s biggest trade union pushing for 7-8% wage increases pushing up German bond yields, which has increased the EUR valuation a touch.
Still, it’s...
