Trading the News on Page 2 at Nobullshit Network Forum

jazzz · 10-13-2008, 09:44 AM

Finexo Market Analysis

* UK getting ready to put tax payers' money into banks (aka nationalization), according to Chancellor of the Exchequer, Alistair Darling.

* US Fed/Treasury considering to get into the unsecured lending market (i.e.commercial paper). This has never happened in the history of the Fed and the legal basis and ramifications are unclear.

* The RBA cut interest rates to 6.00% (i.e. -100 bps.). The expectation was 6.50%. ASX200 saw some support after the move (only stock index, which ended higher yesterday). AUD plummeting.

* Iceland's Prime Minister says that it cannot be ruled out that they will go bankrupt.

* Commodities are plummeting. Several of them were limit down in Shanghai trading. Only exception is precious metals, which are still holding the ground.

* DOW dropped to (and closed) below 10,000 for the first time since 2004.

jazzz · 10-25-2008, 07:34 AM

Hi there,

My week closed with these trades. These were the recommendations i received from my broker.

EUR/JPY
short position at 122,40.
stop loss above 124,00 (-160 pips).
Profits are 120,00 (+240 pips), 118,00 (+440 pips)

EUR/USD
short position at 1,2780.
Stop loss above 1,2900 (-120 pips).
Profits are 1,2600 (+180 pips), 1,2400 (+380 pips)

GBP/USD
short position at 1,6050.
stop loss above 1,6200 (-150 pips).
Profits are 1,5880 (+170 pips), 1,5600 (+450 pips)

Regards

jazzz · 11-10-2008, 07:02 AM

BOE cuts massive 150 bps and sends GBP on a roller coaster ride. US employment report out today likely an ugly one.

Risk aversion rose yesterday in the late US session, but no big follow through in Asia so far. JPY crosses bounce back a bit.

MAJOR HEADLINES – PREVIOUS SESSION

• US Oct. ICSC Chain Store Sales out at -0.9% YoY vs. +0.7% expected
• Australia Oct. AiG Performance of Construction Index out at 36.4 vs. 31.8 in Sep.
• Switzerland Oct. Unemployment Rate rose to 2.5% as expected and vs. 2.4% in Sep.
• Germany Sep. Trade Balance out at 15.0B vs. 13.5B expected.

BOE takes a machete to rates

Yesterday the BOE decided to one up the market with an enormous 150 bp whack to the overnight rate. Expectations had moved from 50 to well over 75 bps on average, but the huge move was certainly not priced into the equation. At first, the market didn't know what to do with this announcement. A knee-jerk selling move that one might expect was the first order of business, but then a huge rally in GBP materialized within minutes, perhaps due to our argument yesterday that a central bank trying to help the economy is better for the currency than one that is dragging its feet, interest rate differentials aside. Alas, the pound ended the day on a very weak note as risk aversion set in and equities sold off. GBPUSD was dragged to a new low overnight and EURGBP was up trying recent highs (BOE rates are now below ECB rates for the first time ever.). Some argue that this puts the BOE ahead of the curve, but we could also argue that the Bank is really only playing catch-up to where it should have been on the curve a long time ago. The numbers rolling in for the UK economy are awful and there is no relief in sight. That said, the GBP short positioning is already very extreme, and there is huge rally potential in GBP if the market sees any sudden rally in risk appetite.

SNB surprise and ECB foot-dragging

The SNB also came out of the blue to cut by 50 basis point simultaneously with the BOE announcement, and this fact fed into the idea of a "coordinated" cut from all of the European central banks and perhaps as much as 100 bps from the ECB, as Euribor contracts spiked out of control ahead of the ECB's actual announcement. But the ECB only moved by the relatively sedate and foot-dragging 50 basis points. At the press conference, Trichet professed a more pronounced negative view on growth now and said inflation pressures are easing, with the ECB seeing price stability in 2009, but no risk of deflation. Considering the ECB's profoundly misguided move in July of this year to hike rates, we can put any projections from this group of characters right into the shredder. The ECB is in complete rear-view mirror mode. Miraculously, the ever-vigilant president declared that the EuroZone was not in a credit crunch. Is that why we have seen a 1.3 trillion Euro bank bailout? The chairman did not rule out a further rate reduction at the December meeting, which in all likelihood will come to pass. The ECB's behavior is not bullish for the Euro...nor was yesterday's -8.0% month-on-month drop in factory orders for September from Germany. Decelerating growth prospects indeed.

US Employment Report

All eyes today on the US employment report. We have a gathering storm of negative employment-related data of late and could see the worst US nonfarm payrolls number today since -300k levels were notched in 2001. Weekly initial jobless claims, mass layoff indicators, the ADP poll and the ISM employment subcomponents are all pointing the same negative direction. Baseline expectations for the payrolls figure, according to Bloomberg consensus, are running around -200k, but we could easily come in well below this. The unemployment rate is expected to jump to 6.3% from 6.1% last month. This would match the high from the last cycle in 2003, but as we have discussed before, the employment situation is far worse this time, especially underemployment. Obama is going to have to create enormous numbers of jobs in the coming years to keep this rate from hitting 8.0% eventually.

CAD too strong?

The employment data for Canada is also up today. CAD has been far too strong of late due to a large M&A deal and we'd like to find a way to short it in the crosses - perhaps AUDCAD or EURCAD? Consider short CAD trades in general, and especially if the employment report shows any sharp deceleration with the other eye on energy prices, after yesterday saw a new 18 month low in crude. History tells us that the Canadian and US economies are tightly coupled and the Canadian unemployment level only started ticking up in February of this year, compared to spring of 2007 for the US unemployment numbers. That's a lot of catching up in the pipeline.

jazzz · 12-05-2008, 11:34 AM

Here are a news recommendation by Finexo...

A worrying sign for those looking to China to save the world economy, China's manufacturing PMI nosedived - from 44.6 in October to 38.8 in November. The export orders component of the PMI survey came out at an astounding 28.2, probably the lowest we have ever seen any component of any PMI survey. This is brutal stuff for the Chinese authorities to contend with. One way to trade this news in G7 is with a short AUD position, as AUD has founds some support recently on stabilizing commodities and rallying equities. Those supports could come under threat this weak and worries over China could add to the bad vibes for the Aussie. Beware that tonight, the RBA is set to adjust their cash target once again. The baseline expectation is for a cut of 75 bps, to bring the rate to 4.50%.

Regards

jazzz · 12-16-2008, 11:36 AM

News Trading Opportunities

ECB members were out Friday talking up the risks of further cuts, with the BuBa's Weber saying that it was necessary to tread carefully if the ECB intended to take rates to a place they have never been before and talking up the risks of negative real rates (We ask: is any positive interest rates negative when there is intense deflation? It seems that the ECB really prefers the rear-view mirror as its best forecaster of inflation...) Others in the ECB argue that they will need to see how data looks in January and February before making any further decisions on rates. This remarkably hawkish stance, especially relative to the ueber-dovish US Fed and BOE stances of late, means that interest rate differentials are rising fast in EURUSD and EURGBP - helping to propel these pairs higher. In the case of EURUSD, for example, the 2-year rate differentials bottomed at under 100 bps in late October, but the latest rounds of ECB rhetoric had pushed that spread close to 150 bps by late last week. One key factor here: the EUR is also rallying in an environment of reasonably resilient risk appetite - so the market's assumption may be that the higher rates are good for owning Euros rather than bad because the failure to cut will exert further damage on the EuroZone economy.

The Q4 Tankan survey in Japan not surprisingly came in with downright awful readings, especially for the outlook component, which matched the 7-year low at -36. What is there to be happy about when the global economy has gone into "a cardiac arrest" as PIMCO's El-Erian puts it, and your currency is making rapid gains? Apparently, the negative data was more than priced in, as the Nikkei rallied furiously on the day and helped keep the JPY on the weak side.

Looking at the calendar for the week, the obvious first focus will be the Fed meeting and rate announcement tomorrow evening. With the Fed moving into ever more aggressive action to stem the risks of deleveraging and the credit squeeze, the assumption is that they will cut rates another 50 basis points to bring the rate to a record low of 0.50%. Some are even talking up the possibility of rates being chopped all the way to 0% on Tuesday, though we consider this very low probability. At this point, it is not terribly relevant as Fed funds have often traded close to 0 recently and quantitative easing is fast becoming a reality. Now debt monetization is the next step and the Fed has even talked about the remarkable step of issuing its own debt. The pressures that will be brought to bear on the economy will be massive next year as consumers look to shore up their private balance sheets. The Fed meeting may serve as the pivot point for this USD sell-off.

The oddest aspect of the situation right now is the positive spin many commentators are trying to put on the situation. One article tries to say that stocks are a bargain because in the past, stocks rallied after the biggest writedowns were announced, citing 2003 as a historical example. The commentators on TV also seem to want to talk up the attractiveness of equity valuations on a historical basis. We detest these comparisons with recent market history- this is an intense global crunch of mammoth proportions that has entirely altered the economic and financial landscape and it is almost irresponsible to use such comparisons. This is a situation like no other and visibility is extremely poor. While it may be a short term positive sign for risk appetite that equities are able to rally in the face of so many negative data points yesterday, other indicators (like spreads on corporate debt) are showing no relief in the credit situation and we suspect that this rally will eventually hit the skids just as every previous one has. Alas, with a New Year on the way and the worst redemption pressures possibly delayed until January, this rally, or at least a ranging environment, could sputter on into the New Year. Regardless, we would not be fans of putting on risk appetite plays, and would prefer to look for reversals back to risk aversion and even buying volatility as it declines back to attractive levels.

jazzz · 12-23-2008, 11:32 AM

Here are some market updates I read on various forex sites and blogs.

Market Movements

* 2-Year interest rate swaps showing the largest one-day drop (15 bps.) in two months... a sign of risk-willingness.
* Our Global Top100 CDS Price Index is edging lower. Now at 123 bps., but still very elevated.
* The White House is still undecided wrt. offering a bail-out to the big3 auto makers. Combined, they will close 59 factories over the next month, putting a maximum pressure on Obama, when he takes office.
* In order to discourage inflow of deposits and get the banking system to start lending again, the ECB yesterday announced that they will cut the rate on deposits to 1.5% by the 21st of January. This move is halting the EUR’s advance.

Forex Recommendations

* EURUSD topped out at 1.4719. EURGBP at 0.9557. EURCHF at 1.5370, under pressure.
* EURUSD Rejected at 200-day MA (1.4700+) 1.4310 then 1.4385 resistance now. 1.4000 test next?
* EURJPY 128.00 resistance. Looking for 125.00 if equities weak…
* USDJPY 90 is key resistance now. May be set for test of low again if equities weak.
* GBPUSD Looking weak again if it stays below 1.5200. 1.4885 structural support.
* USDCAD Bullish above 1.2000. Break back above 1.2160 next key for more upside

Regards

jazzz · 01-10-2009, 07:59 AM

Shocking effects of ADP and Chart Analysis of EUR/USD
The direct ADP private sector employment report rocked the greenback and a reported calculation makeover to make the data more predictive of the non-farm payroll number has left analysts rushing to review forecasts for Friday’s number. Revisions are tending to push to prediction over the 600k barrier, challenging the record 602k decline in 1974. If the disastrous forecasts become reality, President-elect Barack Obama will need to ensure that his stimulus package is “spent wisely”, otherwise the collective hopes that it could be enough will dissipate rapidly. Still in the US, Fed’s Hoenig confirmed what most observers know already, that the outlook for the US economy in H1 is “grim”.

USD losses were not broad-based however, with commodity-linked currencies suffering as commodities hit the skids, with the CRB index falling for the first time this year. AUD was under pressure o/n and was hit by poor data this morning. The Nov trade surplus slumped to AUD1.45 bln vs AUD2.0 bln f/c and AUD2.96 bln in Oct while at the same time building approvals slumped 12.8% m/m, implying that any benefit for the mortgage market from the recent rate cuts are slow to filter through. AUD continued its retreat during the Asian session down to 0.7000 support. However, the USD is expected to maintain its softer bias into the non-farm payrolls, just in case, and further weakness may be forthcoming from a NYT article suggesting that China may be keeping more of its money at home amid the global slowdown, possibly slowing its purchases of US Treasuries.

Matching Australia’s poor trade performance, further evidence of a slowing global economy, if it was needed, came from Taiwan, whose exports recorded their biggest drop on record, falling 41.9% y/y in Dec. Taiwan central bank reacted immediately, slashing rates by 50bp at an unscheduled meeting.

Rate cuts will be heavily in the spotlight in Europe, with the BOE rate decision keenly awaited. Expectations are for a rate cut of between 50bp and 100bp, though this prospect has not dented sentiment towards the GBP to a great extent. A UK Times article states that Chancellor Darling is also considering going down the quantitative easing route as interest rates approach zero and their effectiveness as a policy tool is diminished. However it was noted that this would require a close working relationship between the Treasury and the BOE.

BOJ governor Shirakawa was on the wires during the Asian session, commenting that the bank could still do more to stabilize financial markets, even though its efforts to buy commercial paper was already helping to improve conditions. Targeting FX rates specifically, PM Aso was more vocal, saying that any sharp drop in the USD is very negative for Japan. USDJPY was confined to a tight range following the comments.

EUR/USD

1.3545-55 flat-lining 55-MA support on hourly charts likely to limit downside for EURUSD. 1.3670-80 needs to be overcome for a test of o/n high at 1.3646 and declining 200-MA at 1.3840 lvl. Weaker USD environment into Fri’s NFP report to lend support.

jazzz · 02-05-2009, 07:17 AM

Forex Headlines and Forecast with Chart Analysis USD/CAD

The Canadian Dollar has weakened lately against US Dollar, but considering the numerous factors against the CAD, it would seem that the Forex brokers and traders should be trading it higher. We note two factors that suggest USD/CAD may be ready to pivot higher here, even though it is in the middle of the recent medium term range between 1.1800 and 1.3000. First, the 21-day moving average fell last week and the investing and trading community has held this as support. Second, USD/CAD crossed above the 55-day moving average on Friday, only to close below that level. But today we see the pair charging back above that level, so it appears that we may be preparing for another go at the 1.3000 level. It all depend on what the Forex traders do with it today.

Daily FX-Options

EUR/CHF

Back end volumes moved about 0.5. Volume lower on Monday, with the big broker trading firms selling 6 month 1.50’s in large amounts at a 9.1 volume. Front end volumes came lower as well suggesting that the current EURCHF range will continue.

EUR/USD

Forex traders pushed high volumes most of the day, with the 1 month down from 20/21 to 19.5/20.35. This could indicate that the Forex brokers do not believe the pair will collapse any time soon, Today expect the contract to trade in the range or experience a slight increase.

USD/JPY

Volumes are stable, a little interest for front end 90-91 strikes, and however they are mainly broker trading on the sell side. Expect that the current trading range will continue.

jazzz · 02-21-2009, 10:34 AM

Currency Market Updates & USDJPY Chart analysis

US Policy: Aggressive Spending

Brokers trading the dollar helped it climb on Wednesday to a new six week high against the Yen an a new 2 ½ week high against the Euro as US President Obama announced a new 80 Billion Dollar mortgage bailout bill. The new bill is expected to help close to 9 million families either restructure or refinance their mortgages in order to avoid foreclosure.

At 5PM GMT, the Dollar was up 1 ¼% to the Yen at 93.56 and ½ of a percent versus the Euro to 1.2523 after hitting 1.2557 – its lowest level since early December. The US is continuing its aggressive spending policy to shore up its economic situation, a tactic that might prove detrimental to the valuation of the Dollar down the road. For now, those Investing and trading the greenback see the US doing something and is banking on the possibility that it will work to help stave off a worsened situation.

GBP: Bank of England Might Consider a Further Interest Rate Cut in March

Forex traders took the Sterling down marginally against the Euro and Dollar as the Bank of England released minutes of this past month’s interest rate meetings. The record showed that the BOE members voted unanimously for the policy of “quantitive easing” by purchasing other securities and Gilts. The fear was that based on the minutes and the unanimity of the vote, the Bank of England might consider a further interest rate cut in March.

At 5:15 GMT, the Sterling was off .33 of a percent to the USD at 1.4189 and 1/10th of a percent to the Euro at .8824.

Chart Analysis: More USD/JPY – this time a 5 month look

As we said yesterday, the deviation of Dollar/Yen with respect to its historical patterns in terms of its connection with the risk appetite of Forex traders is a problem that could mean additional weakness for the Japanese currency. Its break above 92.40 is significant technically. This is now the new support level and the JPY/USD is setting its sights on the moving average for the past 100 days, somewhere near 94.00 as well as the 2009 high up at 94.62.

jazzz · 03-13-2009, 12:24 PM

Buy Sell Recommendations of USD and AUD and Chart Analysis GBP/USD

USD

As the stock markets around the world rose, the Dollar suffered on Wednesday as investors seeking higher risk, higher returns left their dollar positions for a host of other currencies. It was such a day for the dollar that even the Hungarian Forint and Polish Zloty gained against the Greenback. After the US stock markets rose 5.8% on Tuesday, European stocks followed suit on Wednesday which brought investors seeking security in the dollar out and into positions with the potential for higher yields.

At 5PM GMT daily FX charts, the Dollar was down 1% to the Euro at 1.2781, down ½ to the Yen at 98.07, down slightly to the Pound to 1.3725 and as well to the Canadian Dollar to 1.2786 and Swiss Franc to 1.1592.

AUD

The Australian Dollar appeared to be the beneficiary of the slip in the dollar as the major currency with the highest yield. Even though the Aussie economy is under tremendous pressure from labor groups and a tremendous slowdown in exports and tourism, two industries fundamental to the Australian economy, the AUD has been the recipient of much risk appetite money.

At 5:15GMT, the AUD was up slightly to the Euro at 1.9654, up .1% to the Yen to 63.77, up ½ to the Canadian Dollar at .8318 up ¾ to the USD at .6496 up .2% to the New Zealand Dollar at 1.2842 and up 1% to the GBP to 2.1122 and up ½ to the Swiss Franc to .7528.

Chart Analysis: GBP/USD 5 Day

The banking crisis in England is continuing to wreak havoc on the currency. Forex Brokers and nvestors are torn as to how much to government is doing to stave off further declines. With trouble in Northern Ireland making headlines again across England and Europe, it seems as if the politicians have neglected the banking crisis. The chart below shows that the big loser this week against a US Dollar, which has been falling itself, is the Pound Sterling – off nearly 3% as of 6PM GMT Wednesday over the past 5 trading sessions. Can the FSA come up with a plan that will soothe investor’s worries or is the Sterling heading to 1.25 as predicted by many analysts? Thursday will be a crucial day in figuring out this answer.