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The Tricky trade of Oil
Never has the oil been trickier than it is right now. The influences on the price are complex, varied and time dependent. It’s even trickier when you look at it from the trade of commodities versus equities. Here are the key things that are catching our attention with oil trading in spot, forwards and equities. Spot vs. Antici...
June 12, 2024Read More >The race has begun – who is left holding the rates bag
FX and indices traders are now on notice – the race to restart economies is upon us. We have to-date seen Riksbank and SNB move policy but with the Bank of Canada (BoC) now entering the rate cut movement – the race is now well and truly on and the interest rate differentials that come into play with currencies will ramp up. Potential for Fur...
June 6, 2024Read More >Where are we? What are the lessons from May?
For years we have been told that ‘value’ will have its day again. The reasoning is vast, deep value in value versus overpriced growth, pricing in risk is stretched, the ‘free money decade is over, and growth will be left holding the bag. You can take your pick as to what reasoning you use regarding this market conundrum, but the conclusion is...
June 5, 2024Read More >Plateauing is just another way of saying ‘stuck’
Let’s make things very clear – Australia’s inflation rate is plateauing in fact I would argue it’s starting to reaccelerate in areas Australia can least afford. From a trading and momentum perspective this needs explaining. Stronger Than Expected Print April's CPI data exceeded expectations and was at the very top of the surveyed ra...
May 30, 2024Read More >FX Analysis – USD bounces, Hot CPI fails to lift AUD, JPY softer on rising US yields
The USD saw decent strength in Wednesdays session, with The US Dollar Index (DXY) rising from an open of 104.67, pushing through the resistance at 105 to hit a high of 105.14 on the back of firmer US Treasury yields. Despite this rally DXY is heading into the end of the month looking to have its first monthly decline since December 2023. Ahead ...
May 30, 2024Read More >Reading between the lines for the USD
Last week I highlighted Governor Chris Waller’s speech – however the more I look into his talk the more it needs greater emphasis as it contained both hawkish and dovish elements. The Hawk Waller indicated that he would need at least three more months of "good" inflation data before considering a rate cut. He was suggesting this might h...
May 28, 2024Read More >Moving forward – the volt revolution of transport
The transportation of the world is becoming one of the most interesting trading places in markets as we clearly have a structural long-term change coming as the world moves from the black stuff (oil) to electricity. But the trader question is – what’s happening in these markets now? The black stuff - Oil Oil prices have softened due ...
May 23, 2024Read More >FX Analysis – USD boosted by FOMC minutes
Mays FOMC minutes released on Wednesday surprised on the hawkish side, bolstering USD and seeing the Dollar Index (DXY) retake the psychological 105 level. While the general view of FOMC members was that policy was “well positioned”, there were a few more than expected who were open to more hikes if needed, questioning whether policy was restri...
May 23, 2024Read More >Where’s the Federal Reserve at?
Slowing Growth and Potential Rate Cuts: Recent economic data suggests a slowdown in growth, contrary to earlier expectations of reaccelerating growth and inflation. Federal Reserve Chairman Jerome Powell's statements and recent economic indicators point towards the possibility of lower policy rates in the near future. Key indicators, such as the so...
May 22, 2024Read More >Economic versus the Federal Reserve Policy Implications
Where’s the Federal Reserve at? Slowing Growth and Potential Rate Cuts: Recent economic data suggests a slowdown in growth, contrary to earlier expectations of reaccelerating growth and inflation. Federal Reserve Chairman Jerome Powell's statements and recent economic indicators point towards the possibility of lower policy rates in the near f...
May 21, 2024Read More >FX Analysis – USD halts decline, GBP downside risks ahead
The recent USD decline stalled in yesterday’s session with FX traders seemingly taking the view that there is not enough thrust from US data to justify a significantly weaker USD just yet. Aside from the inflation aspect – and markets may have reacted a bit too optimistically to the CPI and PPI – jobless claims also eased back yesterday to ...
May 17, 2024Read More >What a difference a (CPI) Day makes
We often talk about, ‘one piece of data does not make a trend,’ that ‘a headline is just a headline’ and that ‘assumptions are not facts.’ We feel this timeless market lesson has been slightly forgotten of late and the latest US CPI data may be case-in-point judging by the market’s reaction to the read. Let have a dive into the ...
May 16, 2024Read More >Banking it – Where are we after the May Central Bank deluge?
What a week and a half we have had - Central Banks the world over have delivered their May decisions for their respective interest rate moves (or non-moves). Thus, we need to review the FX reactions and the outlook for rates for the rest of 2024. Let’s start at home: RBA and the AUD First, as expected the Reserve Bank of Australia (...
May 14, 2024Read More >FX Analysis – USD looking vulnerable after soft data
The negative dollar reaction to a modest tick-up in US jobless claims yesterday (231k versus consensus 212k) where the US Dollar Index (DXY) dropped from session highs at 105.74 to close at session lows of 105.20 seems to be telling FX traders that tells us that: a) markets are probably lacking some sense of direction in the period between pay...
May 10, 2024Read More >Future metals: are we seeing the 2000s again?
Plenty has been made of the drive towards nickel and lithium as “future metals” as the world's “electrification” takes hold. This “electrification” has been nicknamed the “volt revolution” and when you get these kinds of technological leaps - what's appearing to be the “winner” now doesn't necessarily mean it will be the overall...
May 7, 2024Read More >