Moneylender
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Trading with point and figure
- Thread starter Dentalfloss
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Dentalfloss
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** EVENTS PREVIEW **
********************
The statistical schedule is unlikely to overwhelm summer thinned markets today, featuring as it does the overnight UK RICS House Price survey, US weekly jobless Claims and Import Prices. A busier day in terms of central bank policy has the overnight RBNZ and BoK decisions to digest ahead of those from central banks in the Philippines, Mexico and Chile, while the IEA completes this week's round of monthly oil market reports, and the UK sells 20-yr Index-Linked Gilts ahead of the US auction of a new benchmark 30-yr Treasury Bond. In terms of US weekly jobless claims, these are seen dipping to 265K after last week's rebound to 269K, but still fitting with the narrative of solid labour demand, as evidenced by teh July Labour report and this week's Labour Market Conditions Index and JOLTS Job Openings. In respect of the UK 2036 Index-Linked auction, it is worth observing that in contrast to the rally in 5 and 10-yr breakeven rates, the 20-yr is close to its lows, and while the 20-yr area is something of a no man's land for investors, a little too short for pension fund investors looking to match liabilities, and rather too long for the speculative community, the current 2.78% breakeven rate looks rather unambitious given the likelihood that RPI will rise quite sharply as a consequence of the sharp fall in the GBP. As an aside, in respect of this week's BoE's QE Gilt reverse auctions, the very well covered (4.71x) 7-15 yr operation yesterday underlines that Tuesday's over 15-yr "fail" was above all due to pension fund liability regulations and a dearth of liquidity at the long end, with the fact that until the November Autumn statement outlines exactly how much the Treasury intends to borrow for infrastructure spending (likely to be primarily funded by long-dated Gilt Sales), the BoE's QE operations will be larger than gross Gilt sales at the long end, which is eminently a massive disincentive for pension funds to sell their holdings, regardless of yield levels.
** Philippines, Mexico & Chile - Monetary policy meetings **
- As markets once again push back on Fed rate expectations, it is little surprise that EM central banks are seen having rather more room for manoeuvre, and EM currencies are favoured in the desperate hunt for yield, via carry trades. The as expected overnight rate decisions in New Zealand (-25 bps to 2.0%, with an explicit admission that the RBNZ is basically helpless in its fight against NZD strength) and the Bank of Korea (unchanged at 1.25% with a clear easing bias, despite the observation that the domestic outlook is gradually improving) warm the plate for another busy day for EM central banks. The Philippines continues to stand out as one of the better examples how to develop domestic capital markets, and escape the strictures of dependency on foreign borrowing, notwithstanding current concerns about incoming President Duterte. The BSP is expected to keep its main rate at 3.0%, with inflation very well contained at 1.9% y/y, though expected to edge up into its 2.0% to 4.0% target range, and Q2 GDP seen accelerating to an impressive 7.0% y/y (due August 18), and thus putting the country at the very top of the EM and DM global growth league, and per se on the top table for EM investors. Mexico's central bank has been fighting an attritional battle for most of 2016, subject to hefty in- and outflows into domestic capital markets, underlining its status as the proxy for EM risk appetite, but also subject to oil market fluctuations and concerns about the risk of a trump victory in the US elections, given the latter's incessant vitriol about the US' southern neighbour. Banco de Mexico is expected to hold rates at 4.25%, with July's CPI inflation data having held steady at a relatively well behaved 2.7% y/y and the MXN showing a rather firmer profile since June's 50 bps rate hike; a further hike to 4.50% in Q4 still seems likely, particularly if the MXN were to come under renewed pressure. It seems almost churlish to classify Chile as an EM country, with its foreign reserve assets being larger than its national debt, thus underpinning its A+ credit rating, and an economy that is dependent on its copper exports, but still managing to overcome the headwinds from the roller coaster ride of copper prices. Chile's central bank has maintained rates at 3.50% all year (having raised rates by 50 bps in 2015), and is expected to keep rates on hold today and more than likely for the rest of the year. CPI has finally returned to the top of the central bank's 2.0% to 4.0% target range, having steadily fallen from 5.0% in August 2015, and is likley to decelerate further. The central bank's latest quarterly business survey suggested that growth will be subdued for the rest of the year, thus putting paid to the optimism that had been expressed in Q2, with businesses pointing to elevated levels of political and by extension economic uncertainty, with the Bachelet government's only partially realized reform plans foundering as its popularity has fallen.
from Marc Ostwald
********************
The statistical schedule is unlikely to overwhelm summer thinned markets today, featuring as it does the overnight UK RICS House Price survey, US weekly jobless Claims and Import Prices. A busier day in terms of central bank policy has the overnight RBNZ and BoK decisions to digest ahead of those from central banks in the Philippines, Mexico and Chile, while the IEA completes this week's round of monthly oil market reports, and the UK sells 20-yr Index-Linked Gilts ahead of the US auction of a new benchmark 30-yr Treasury Bond. In terms of US weekly jobless claims, these are seen dipping to 265K after last week's rebound to 269K, but still fitting with the narrative of solid labour demand, as evidenced by teh July Labour report and this week's Labour Market Conditions Index and JOLTS Job Openings. In respect of the UK 2036 Index-Linked auction, it is worth observing that in contrast to the rally in 5 and 10-yr breakeven rates, the 20-yr is close to its lows, and while the 20-yr area is something of a no man's land for investors, a little too short for pension fund investors looking to match liabilities, and rather too long for the speculative community, the current 2.78% breakeven rate looks rather unambitious given the likelihood that RPI will rise quite sharply as a consequence of the sharp fall in the GBP. As an aside, in respect of this week's BoE's QE Gilt reverse auctions, the very well covered (4.71x) 7-15 yr operation yesterday underlines that Tuesday's over 15-yr "fail" was above all due to pension fund liability regulations and a dearth of liquidity at the long end, with the fact that until the November Autumn statement outlines exactly how much the Treasury intends to borrow for infrastructure spending (likely to be primarily funded by long-dated Gilt Sales), the BoE's QE operations will be larger than gross Gilt sales at the long end, which is eminently a massive disincentive for pension funds to sell their holdings, regardless of yield levels.
** Philippines, Mexico & Chile - Monetary policy meetings **
- As markets once again push back on Fed rate expectations, it is little surprise that EM central banks are seen having rather more room for manoeuvre, and EM currencies are favoured in the desperate hunt for yield, via carry trades. The as expected overnight rate decisions in New Zealand (-25 bps to 2.0%, with an explicit admission that the RBNZ is basically helpless in its fight against NZD strength) and the Bank of Korea (unchanged at 1.25% with a clear easing bias, despite the observation that the domestic outlook is gradually improving) warm the plate for another busy day for EM central banks. The Philippines continues to stand out as one of the better examples how to develop domestic capital markets, and escape the strictures of dependency on foreign borrowing, notwithstanding current concerns about incoming President Duterte. The BSP is expected to keep its main rate at 3.0%, with inflation very well contained at 1.9% y/y, though expected to edge up into its 2.0% to 4.0% target range, and Q2 GDP seen accelerating to an impressive 7.0% y/y (due August 18), and thus putting the country at the very top of the EM and DM global growth league, and per se on the top table for EM investors. Mexico's central bank has been fighting an attritional battle for most of 2016, subject to hefty in- and outflows into domestic capital markets, underlining its status as the proxy for EM risk appetite, but also subject to oil market fluctuations and concerns about the risk of a trump victory in the US elections, given the latter's incessant vitriol about the US' southern neighbour. Banco de Mexico is expected to hold rates at 4.25%, with July's CPI inflation data having held steady at a relatively well behaved 2.7% y/y and the MXN showing a rather firmer profile since June's 50 bps rate hike; a further hike to 4.50% in Q4 still seems likely, particularly if the MXN were to come under renewed pressure. It seems almost churlish to classify Chile as an EM country, with its foreign reserve assets being larger than its national debt, thus underpinning its A+ credit rating, and an economy that is dependent on its copper exports, but still managing to overcome the headwinds from the roller coaster ride of copper prices. Chile's central bank has maintained rates at 3.50% all year (having raised rates by 50 bps in 2015), and is expected to keep rates on hold today and more than likely for the rest of the year. CPI has finally returned to the top of the central bank's 2.0% to 4.0% target range, having steadily fallen from 5.0% in August 2015, and is likley to decelerate further. The central bank's latest quarterly business survey suggested that growth will be subdued for the rest of the year, thus putting paid to the optimism that had been expressed in Q2, with businesses pointing to elevated levels of political and by extension economic uncertainty, with the Bachelet government's only partially realized reform plans foundering as its popularity has fallen.
from Marc Ostwald
Moneylender
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Closed my short at 10635 level area with a good few!!
Moneylender
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Nearly 100 pips before breaky, luvvvvvvly
Dentalfloss
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and bounce
Dentalfloss
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you must take the bounce aswell
Moneylender
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f2calv
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I know, I know but it goes against the grain this high up!! lol
Go long before you close the short, when you can move the long stop to breakeven then close the short and ride the move up risk free. i.e. hedge
Moneylender
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f2calv
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If you are happy to manually close out the short, then there is simply no difference between that OR just leaving the short open and taking a hedging long (you only sacrifice the spread which after nearly 100pts profit is an acceptable cost).
Moneylender
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Would have been a good bounce!!!
Dentalfloss
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Would have been a good bounce!!!
you have to take those aswell..that is what p/f is all about
Dentalfloss
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excellent bounce on dax and dow
Dentalfloss
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dax really needs to test the bulls in 10766 area
Moneylender
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Looking to short here????? NO signal yet
MichaelJohnFX
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Looking to short here????? NO signal yet
You're nailing everything these days money, well done.
MichaelJohnFX
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Needs to stay above 10680 to remain bullish (on my candlestick chart)
Moneylender
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Had a few wrong ones Chronic, but its improving. all down to 007 and PnF.
Moneylender
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Dont say a word!!! lol
Moneylender
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Looking to short here????? NO signal yet
Closed my short, expecting a small bounce in next 30 mins with US news.
Lets see.
