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Rbnz

SELL GBPAUD: STRAT TRADE - 5 Days up P=98.78% 6TH DAY LOWERGBPAUD: 1. SterlingKiwi has been aggressively bid higher for the last 5-days on the back of sterling data outperforming last week, broad aussie weakness and a general recovery from lows. 2. Statistically, after analysing the last 16.5yrs of data it shows the probability of a 6th day or more of buying is 1.22% which means there is an implied 98.78% chance that we move higher today - I like these odds so will add a short here. - If we were to see another day of buying, a 6th day, then the probability of a 7th day is even better on the sell-side odds of 99.45% so i will add to shorts if this is the case - the max number of buying days in GBPAUD has been 10 once and 9 3 times. 3. Plus aussie 30 bill rates firmed up on monday implying only a 5% chance of a september cut down from 8% of the past week, and sterling OIS rates came off from fridays rally after the market decided to fade last weeks data. - Also we have found some technical price resistance at the 1.72 handle so being short here makes sense. Trading strategy - GBPAUD Sell @1.721: 1. Short GBPAUD pretty much at market TP should be 100pips lower at the 1.711 level. 2. Also check my previous post of short gbpnzd into rallies at 1.81 and GBPUSD into 1.315-32
Short
by QuantumLogicTrading
4
AUDNZD - STAT TRADE: BUY AFTER A 5TH DAY OF SELLING; P=98.7%AUDNZD: 1. Aussie kiwi has been aggressively sold lower for the last 8/9 days, with the bullday being only 4pips higher (pretty much 9 straight days of selling) and most recently the last 4 days have been pure consecutive closes lower. 2. Statistically, after analysing the last 16.5yrs of data it shows the probability of a 5th day or more of selling is 3% which means there is an implied 32/33/ 97% chance that we move higher on the next day, these odds arent too great so I suggust NOT buying on open, instead lets wait and see if we can get another close lower on the daily that takes us into the strong support zone at 1.041/3 - then this will mean buying the probability that a 6th or more day of selling occurs which is 1.3% or an implied chance of 98.7% or 99/100 that the price will go up on the 6th day Trading strategy - AUDNZD wait for monday to close lower at 1.041/3 and buy tuesdays open: 1. I advise buying aussie here after the 5th day lower as the 6th day has a 98.7% chance of moving higher, after a 5th day of selling, the odds are good and I will take part in this.
Long
by QuantumLogicTrading
5
SHORT GBPNZD ON RALLIES INTO 1.81: RBNZ GOV WHEELER HIGHLIGHTSThe market took RBNZ Wheelers comments as largely hawkish before fading off to neutral after interestingly Wheeler mentioned that the current market rate tracker has 35bps of cuts priced in - illuding to 2 more cuts being likely though he failed to mention how realistic this expectation is past what future data holds. I like being short GBPNZD into 1.81 rallies with 100pips tp at 1.80 - the market has remained somewhat capped/ rangebound since the RBNZs decision on the 10th between 1.81-79 and 1.81 has held on a number of occasions on the m30 (about 20) so shorts here look firm and i think will continue to be, especially since the GBP rates spike on friday looks to be tamed with the 1.81 and i expect this to fade throughout th eweek giving more reason than not for gbp downside - especially vs NZD since there isnt any data to get in the way this week and last weeks above average employment report was the last say (along with Wheelers comments now). On a side note and for similar reasons I like to be short gbpusd as Fed Yellens speech is largely likely to be skewed to the hawkish side given the other speakers last week trying to reaffirm the Feds control - though durable and GDP data remains the biggest risk imo - a miss here and cable will likely trade into the 1.33 handle, though i would still maintain my fade on rallies and sell here. RBNZ Gov Wheeler Speech Highlights: -RBNZ GOVERNOR WHEELER SAYS MONETARY POLICY FACES CHALLENGES IN TURBULENT TIMES -RBNZ GOVERNOR WHEELER SAYS SCOPE OF MONETARY POLICY CONSTRAINED BY DEVELOPMENTS OUTSIDE COUNTRIES' BORDERS -RBNZ GOVERNOR WHEELER SAYS CURRENT INTEREST RATE TRACK BALANCES A NUMBER OF RISKS WHILE GENERATING INCREASE IN CPI INFLATION -RBNZ GOVERNOR WHEELER SAYS TWI FX RATE ALREADY AT HIGH LEVEL -RBNZ GOVERNOR WHEELER SAYS FLEXIBLE INFLATION TARGETTING MOST APPROPRIATE FRAMEWORK -RBNZ GOVERNOR WHEELER SAYS CURRENT INTEREST RATE TRACK INVOLVES EXPECTED 35 BASIS POINTS OF CUTS
Short
by QuantumLogicTrading
SELL EUR V AUD, USD, NZD: ECB MONETARY POLICY MINUTES HIGHLIGHTSAfter 5days higher EUR$ Statistically is a 80th percentile sell opportunity - the monetary policy minutes were dovish on the margin reiterating and stressing the ECB's willingness to "Boost stimulus again if needed". This should put downside pressure on EUR given september meeting is coming up (when most likely to add to easing). EURAUD and EURUSD shorts here look technically the best and fundamentally with EURNZD also possible and an alternative for EURAUD (depends on your preference - higher differential = NZD; weaker monpol fwd guidance/ future rate stability = AUD). ECB Monetary Policy Minutes Highlights: ECB SAYS "WIDE AGREEMENT" AMONG COUNCIL MEMBERS NOT TO DISCUSS ANY MONETARY POLICY REACTION AT JULY 20-21 MEETING -Brexit Vote Created New Headwinds for Eurozone Economy, Heightened Uncertainty-ECB Minutes -Brexit Vote Could Affect Global Economy in Unpredictable Ways-ECB Minutes -Policymakers Stressed ECB's Readiness to Boost Stimulus Again if Needed-ECB Minutes -Policymakers Thought it Was Too Soon to Discuss Fresh Stimulus-ECB Minutes -ECB Saw Market Impact of Brexit Vote "Contained"-ECB Minutes -Policymakers Stressed Need To Safeguard Transmission of ECB Policies Through Banks-ECB Minutes -Policymakers Noted Apparent Link Between Bank Stock Prices, Bank Lending Volumes-ECB Minutes ECB ACCOUNT OF MONPOL MEETING -Called For Measures To Address Weak Profitability -No Clear Upward Trend In Inflation Path -Premature To Discuss Fresh Stimulus ECB'S PRAET: CALLS WEAK PRICES AN 'ONGOING SOURCE' OF CONCERN
Short
by QuantumLogicTrading
SHORT GBP VS AUD, NZD, USD: FADE RALLIES - RETAIL SALES BEATRetail sales outperformed on all cylinders today and GBP as expected has rallied into nice shortable levels now - with brexit uncertainty likely to continue to way and continued dovish BOE support also equally weighing on sterling in the future. My preferred shorts immediately are vs USD as i expected Fed Dudley and Williams (speaking today) to talk the extremely battered USD higher (as they did earlier in the week). I also like medium-term (end of next week shorts) vs NZD and AUD as GBPAUD and GBPNZD come into nice resistance at 1.81 and 1.713, after closing two days with both aussie and kiwi weaker i think this third day higher will be the last and thus a high probability opportunity to short GBP - I also like these AUD and NZD longs given the above average employment reports from both NZD and AUD this week which seemingly are yet to be priced vs GBP. Further the medium term view vs AUD and NZD of short GBP derives from the trend - where you can see GBP has lost 1000pips post brexit as the implied interest rate differential between GBP and AUD/ NZD has increased and is projected to increase as BOE ease rates and AUD and NZD rates are likely to remain stable (especially AUD given the SOMP and RBA minutes). Whilst NZD rates remain at the pinnacle of 2% so even if the RBNZ does ease as expected the differential between sterling and kiwi will remain the highest for yield seekers for the next 50bps lower, which is likely to be neutral. Trading strategy - Short GBP vs AUD, NZD, GBP in proportionate SMALL lots and add if higher: 1. Short GBPUSD @1.317 - 1.305/8TP1 1.290TP2 2. Short GBPAUD @1.713 - 1.693TP1 1.673TP2 3. Short GBPNZD @1.81 - 1.7910TP1 1.777TP2 I also like this strategy given the 3-way exposure net hedges any individual cross risk e.g. aud nzd or usd.
Short
by QuantumLogicTrading
2
AUDUSD LONG: RBA GOV STEVENS SPEECH HIGHLIGHTS"It's a search-for-yield world and this country still looks attractive because other yields look so unattractive," Mr. Stevens said in a joint interview with The Wall Street Journal and the Australian newspaper ahead of his retirement next month. "That's not something that the Reserve Bank can wave a wand and make go away." The below and above support my bullish AUD$ view, the RBA/ Gov Stevens seems to have accepted and become contempt somewhat that AUD appreciation will continue in an era of low global interest rates as ive said before/ earlier. I continue to like AUD$ to 0.78 12m highs, on the back of weak US CPI.. USD currently seeing some bids on the back of Fed Dudleys hawkish comments (attached), but i nonetheless think CPI will be the lasting word on the USD front and will help AUD$ bid up to the 0.78 level. USD strength comes as a function of the fed funds futures which are up at 18% probability of a sept hike vs 9% yesterday, though this should be faded into days end as the CPI weakness takes over RBA Gov Stevens Speech Highlights: RBA Gov. Stevens: World Economy Ready for U.S. Rate Rise RBA Gov. Stevens: Stronger GDP Growth Rates Would Be Welcomed RBA Gov. Stevens: Should Be Possible to Expand Budget, Retain AAA-Rating RBA Gov. Stevens: House Prices Must Still Be Watched Carefully RBA Gov. Stevens: Worrying Knowledge Gap Around China Economy RBA Gov. Stevens: Cash Rate Just One Variable for Australian Dollar Level RBA Gov. Stevens: High Yields in Australia in Infrastructure, Property RBA Gov. Stevens: Hard to Wave Away Demand for Australian Dolla RBA Gov. Stevens: Australian Housing Not in Risky Category RBA Gov. Stevens: Housing Debt Is Significant RBA Gov. Stevens: No Fresh Surge in Housing Leverage RBA Gov. Stevens: Housing Slump Would Not Lead to Systemic Risk RBA Gov. Stevens: Housing Slump Would Not Trigger Bank Failures
Long
by QuantumLogicTrading
5
NZDUSD/ AUDUSD: RBNZ GOV WHEELER SPEECH HIGHLIGHTSGovernor of the RBNZ Wheeler offered little bearish pressure on kiwi, refusing to go into any intervention talk and failing to say what the bank will actually use to tame this deflationaire NZD they are experiencing at the moment - with the comments below in mind imo this leaves on direction for Kiwi (short of some FOMC/ USD bullish pressure which seems unlikely as rate expectations continue to be sold-off on the back of a quiet data week) and thats higher - in the speech it became apparent that cutting rates does little to curb kiwi strength given the relative differential remains the highest in G10 in this low interest environment both AUD and NZD rates remain some 50-150bps more attractive for those low risk yield seeking funds. On a break of 0.733 I see NZD$ moving towards 0.76 - though any USD strength could tame the cross, especailly given 60bps of further cuts have been built into the kiwi projections - though given there is 6wks until the next meeting imo there is certainly time for us to move higher before moving lower into the meeting as dovish expectations build as they did before. From here AUD looks more attractive here given their lack of forward guidance, and already breakout levels 0.78 is now the target - USD strength may continue weak given the presidential election.. is it likely the FOMC will hike just before an election e.g. sept or nov? despite their independence this seems unlikely + imo a Dec hike makes the most sense especially as some feds call for some consistency e.g. 12m as it is easier to measure policy transmission this way. One potential downside to this view is USD strength, whilst we seem to be in a wave of relentless selling this could be reversed if it is no election related (though there is little else impetus offered) but nonetheless given AUD's breakout i think the 0.78 target is still fair and given NZDs reaction already - it is unlikely we see sellers from here, this reaction almost mimics the RBA's rate cut reaction e.g. 50pips higher - but that was then followed by 200pips higher 1wk later.. we could certainly be in for the same price action here and this is what my bets are on. RBNZ Gov Wheeler Speech Highlights: -WHEELER: NOT SURPRISED BY NZD MOVE AFTER TODAY'S DECISION -WHEELER: RBNZ HAS BUILT 60BPS OF CUTS INTO PROJECTIONS -WHEELER: NO SERIOUS CONSIDERATIONS OF A 50BPS CUT -RBNZ GOV WHEELER: WOULD LIKE TO SEE MOST OF RATE CUT PASSED ON BY BANKS -WHEELER: THERE IS FLEXIBILITY IN POLICY TARGETS AGREEMENT -WHEELER: WANT NZD TO FALL, WANT TO TAKE PRESSURE OFF NZD WITH LOWER RATES -WHEELER: DEBT TO INCOME TOOL UNLIKELY TO BE IMPLEMENTED THIS YEAR -WHEELER: WAGE MODERATION GREATER THAN RBNZ EXPECTED -WHEELER: RBNZ HAS LIMITED INFLUENCE OVER NZD -WHEELER: WOULD BE CONCERNED IF THERE WAS A FURTHER DROP IN ST INFLATION EXPECTATIONS -WHEELER: WILL LOOK AT NZD REACTION OVER COMING DAYS
Long
by QuantumLogicTrading
1
NZDUSD: RBNZ MONPOL DECISION PREVIEW - BOE OR RBA STYLE?RBNZ Monetary Policy Decision : 1. At 22:00GMT the RBNZ are expected to cut their OCR rate to 2% from 2.25% (25bps), further they will release their monpol statement and rate statement then too - with RBNZ Gov Wheeler speaking 1hr after the release. 2. The are a number of outcomes which are likely to or not to affect the NZD$ market, I will list the combinations below from the very LHS/ Dovish to the more mild and RHS- Combination of outcomes - assuming the 25bps cut is certain as it is priced 100% into kiwi rates markets: 1. LHS NZD$ response fall to 0.690-0.681 - a 50bps rate cut, dovish statements and offering strong easing biased forward guidance e.g. hinting at further cuts likely, possible QE, other alternative measures being taken if kiwi persists strong - and Gov Wheeler Reiterates this dovish and highly committed sentiment in his speech.. - BOE and Gov Carney speech last week is a good illustration of a LHS response, very strong commitment to future easing - despite denying negative rates (housing market sentiment could be the equivalent here) 2. Average NZD$ response fall to 0.710 on the day - a 25bps rate cut, some weak references to future monpol - Wheeler fails to convince the market anything new will be coming 3. RHS NZD$ response = stable at market, then whipsaw higher to 0.73 on the day as investors flock to the highest G10 carry - a 25bps cut, no references to more easing and a theme of conplacency - Wheeler is neutral and perhaps makes mention to the housing environment limiting the RBNZ's hand with future easing. - RBA's rate cut and SOMP last week and Gov Stevens speech yesterday is a good example of a RHS rate cut and neutral statement/ Speech - offering no forward guidance on policy, no hits at future easing conventional or otherwise - where we have seen AUD$ move 200pips higher despite the cut My Opinion on the most likely outcome: 1. Assuming the RBNZ have seen the very bullish AUD reaction to this weeks WEAK rate cut by the RBA/ Stevens (as discussed above) and the RBNZ has also seen the bearish reaction of the market towards BOE/ Carney's reaction to their aggressively dovish statement, speech and policy measures (e.g. cut and 60bn in QE); - And assuming the RBNZ have seen Kiwi's strength (or USD weakness) and the high levels/ bullish sentiment kiwi is going in at into this monpol decision, which is particularly important now since the RBNZ's emergency economic assessment which stated that they didnt appreciate the strong kiwi$ and would like to bring it down. - These two factors in mind, plus the fact kiwi data has remained weak and RBNZ at even 2% after a 25bps cut is still the highest yield currency by a massive 50bps in G10 (AUD at 1.5%), so thinking of these 4 elements which are all very dominant calls for dovish/ 50bps cut policy It makes sense to think that the RBNZ will be skewed to delivering a very dovish/ LHS monpol package and a BOE M. Carney like speech by Gov Wheeler, especially since the House inflation issue has been discussed and macroprudential policies are set to be put in place in september to try and curb this issue where of past this has been a hawkish limitation on the RBNZ's will to be dovish and ease more. - However, guessing central banks this year has been tricky (BOJ in mind) so there is no certainty, and also there are some worrys over the RBNZs ability to cut 50bps at once - despite the need for it as a 25bps cut leaves a 50bps differential between AUD and NZD which will continue to cause deflationairy pressure and bullish NZD as investors flock to kiwi over the close partner Aussie - given this the RBNZ should be even more inclined to cutting the 50bps so that their ccy isnt used as the "carry ccy". There has been several calls by sell-side houses for a 50bps cut, but as above only time will tell.
Short
by QuantumLogicTrading
3
NZDUSD/ AUDUSD: MONETARY POLICY DECISION HIGHLIGHTSRelatively poor delivery from the RBNZ, by the looks of the whipsaw the market wanted/ expected 50bps based on the AUD differential and the RBA rate cut last week 50bps or some alt policy (e.g. QE) seemed like the smart move to make. From here Kiwi and Aussie longs look preferential as the macro environment shifts to a yield seeking stance from monpol trading - 0.782 for AUD and 0.76 for NZD seem the next bull levels. RBNZ unlike RBA offered some promsing forward guidance though e.g. "further policy easing willl be required" and "A decline in the exchange rate is needed" and "high NZD is causing negative inflation in tradables sector" and "Low global rates are placing upward pressure on the kiwi dollar" - all of which comments point to the RBNZ issuing more dovish easing but it does also ponder the question that given they knew this before making the decision why they didnt execute some of the "further policy easing" and "monpol will continue to be accommodative" which will be required in the future now, to have a greater effect vs just a 25bps cut which the market had already digested weeks ago. The RBNZ also interestingly referenced the low global rates environment causing NZD strength through carrry/ hot money flows - which once again begs the question if the RBNZ know that their rate is the leading rate in G10 by 50-150bps, why did they only cut 25bps as a 25bps cut still keeps NZD as the headline ccy for carry and will likely continue to attract hot money flows unless investors are scared by aggressive future policy - which is now in the hands of Gov Wheeler to project the aggressiveness (or not) of the RBNZ to combat the rate differential and consequently bring the NZD down where they feel it is acceptable. Imo given the markets reaction alot is riding on Gov Wheelers speech in 35mins - he needs to be VERY dovish in his forward guidance rhetoric and offer certainties that make kiwi seem less stable than AUD in the future and thus send the hot money flows into AUD and in order to tame kiwi below 0.73, otherwise we will likely see a replication of the AUD case where we moved 100pips+ on the day despite a cut and SOMP and Gov Stevens speech. From here we wait for the speech. If the speech fails to tame kiwi, i suggest buying kiwi as it is likely to outperform given the lack of easing vs expectations/ what is needed to move NZD lower. Further AUD longs are also advised in this carry seeking macro environment - a Dovish RBNZ makes AUD more attractive but even a neutral RBNZ should help AUD also as it puts less pressure on the RBA to ease since the rate differential between their biggest partner is large enough and still in their favour for kiwi buying for aussie. Nonetheless at these technical levels i like AUD to 0.78 and kiwi to 0.76 if we break 0.734 and Wheeler isnt specific/ aggressive with the forward guidance + the USD weakness is likely to last this week with 0 data coming out so longs make even more sense if only short term RBNZ Monetary Policy Decision Highlights: RBNZ: Risk of Further Declines in Inflation Expectations RBNZ Says Further Policy Easing Will Be Required RBNZ: House Price Inflation Adding To Financial Stability Concerns RBNZ: Monetary Policy Will Continue To Be Accommodative New Zealand Dollar Rises After RBNZ Cut To US$0.7315 RBNZ: A Decline In Exchange Rate is Needed RBNZ: House Price Inflation Remains Excessive RBNZ:Lower Dairy Prices Depressing Farm Sector Incomes RBNZ:Domestic Growth Supported By Inward Migration, Construction, Tourism RBNZ: Low Global Rates Placing Upward Pressure On NZ Dollar RBNZ: Trade Weighted Index Signficantly Higher Than Assumed in June MPS RBNZ: High NZ Dollar Causing Negative Inflation in Tradables Sector NZ Central Bank Sees 90-Day Bank Bill at 2.1% in 4Q 2016 vs Prior 2.2% NZ Central Bank Sees 90-Day Bank Bill at 1.8 % in 2Q 2017 vs Prior 2.1%
by QuantumLogicTrading
NZDUSD: TECHNICAL ANALYSIS - TARGET 0.701 BUT USD WEAKNESS?NZD$ Technical Analysis: Moving Average/ fair price gauge: 1. Kiwi looks rich here at the lower 0.72 level which, significantly above the 3m and 12m which sit at 0.703 and 0.690 respestively, whilst the 1 trades at 0.711. - However, going into RBNZ where they are expected to be dovish (discussed in detail in attached post), these MA levels fall nicely in line with areas of price action suppport and thus will be used as profit targets - thus 0.711, 0.701 and 0.691 are my TP1 TP2 and TP3 levels however, given the bearish bias >50% of my lots will be squared at between the 0.701 and the 0.61 level. The 0.711 level is an intermediate TP, which is better suited for 0.718 shorts vs the 0.722 shorts that i currently hold. 0.691 is possible but is skewed towards the bottom of the range, with 0.681 at the very LHS - a 50bps cut and strong dovish forward guidance e.g. like BOE will likely offer us here - cable managed to fall some 350-400pips which ceteris paribus takes kiwi into the 0.681 level also. Volatility 1. Realised vol has contracted aggressively in the last few days as the daily ranges have tightened unsurprisingly going into RBNZ - IV on the other hand also unsurprisingly has traded bid as option positioning increases as investors place bets on RBNZ. - Net bets to date look to be bearish, with current 25d risk reversals skewed to the downside at -2.6vols, and across the view we observe a -0.5 to -1 downside bias reflecting the expected RBNZ dovish pressure expected. - 50d ATM vols trade currently at 30%, 14.8% 1wks, 12.3% 2wks and 11.3% 1m - clearly the RBNZ and following speakers are steepening the vols here. Though interestingly past current and 1wks, 2wk and 1m IVs are flatter than RV, indicating the market expects kiwi price action to settle after the next week which could mean we see NZD$ move post RBNZ then stabalise at this level vs obseriving continued seesaw action of the past 6wks e.g. 0.70-3 ranging. - Interestingly RV has developed a 60-80% correlated pattern of aggressive/ volatile price action emerging AFTER RV reaching the 5.0-5.5 level (current levels) so assuming my/ markets RBNZ forecasts are correct one would expect this move to be lower (ive highlighted these moves). Standard Deviation: 1. On the daily weve seen SD normalise from the previous levels where kiwi tested the +2 levels after realising these upper 0.72 levels for a sustained amount of time now - hence NZD$ trades at pretty normal levels for the linear regression though an uptrend as now formed vs sideways/ flat being the previous trend. However, I am betting on the RBNZ offering kiwi lower and realising some days below the 0.70 which should see the kiwi trade at 0.70 as an average price at years end - assuming the RBNZ has seen RBA and BOE (and the difference in response and will use this to make their policy effective).
Short
by QuantumLogicTrading
GBPNZD: Uptrend continuationWe're long GBPNZD from 1.8431, with stops at 1.82598. In related ideas you can see my long term NZDUSD analysis, which makes me think this pair is due to embark in a lengthy daily/weekly uptrend soon. After the first push, a pullback came and has given great opportunity to enter longs. We now have to break the blue box resistance up, and trade comfortably higher and/or expand the daily range from this zone, upwards. If not in, you can risk a long with stops at 1.8423, and target the level on chart. Check out my updated track record here: pastebin.com If interested in my real time whatsapp alerts and swing trading newsletter, or in personal tuition, contact me privately. I'm offering a considerable discount on a packaged course which includes access to my private trading signals list for a year. Cheers! Ivan Labrie Link to Tim West's chatroom: www.tradingview.com We discuss setups like this often there. Feel free to stop by and subscribe to his indicator pack. If you have any questions ask. Risk disclaimer: My analysis is provided as general market commentary and does not constitute investment advice. I will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
Long
by IvanLabrie
NZD trade weighted index: Short NZD against strong currenciesNZD is a short against its main trading partners. The uptrend in this biweekly chart exceeded the target and ran right into the previous downtrend mode, so it'll naturally come back down to the uptrend mode at the very least. Look for prolonged weakness in NZD crosses, and exploit it. Thank me later... Check out my updated track record here: pastebin.com If interested in my real time whatsapp alerts and swing trading newsletter, or in personal tuition, contact me privately. I'm offering a considerable discount on a packaged course which includes access to my private trading signals list for a year. Cheers! Ivan Labrie Link to Tim West's chatroom: www.tradingview.com We discuss setups like this often there. Feel free to stop by and subscribe to his indicator pack. If you have any questions ask. Risk disclaimer: My analysis is provided as general market commentary and does not constitute investment advice. I will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
Short
by IvanLabrie
BUY USD VS AUD, NZD & GBP: FOMC MEMBER KAPLAN SPEECH HIGHLIGHTSMore of the same here - my USD view remains bullish against AUD, NZD, GBP from here and at these levels. Especially on the back of the RBA i still think we should see 0.745 in AUD$ today, 0.69 in kiwi on the 10th (RBNZ), and 1.28 for GBP on the 4th (BOE) Fed Kaplan Speech Comments: Kaplan: Expects Continued Oil Price Volatility Until Year-End Kaplan: 1Q, 2Q GDP Figures Were Disappointing Kaplan Expects to See More Bankruptcies, M&A and Restructuring In Energy Sector This Year DJ News Kaplan: Dallas Fed Still Expects Full Year GDP of 2% Due to Solid Consumer Demand Kaplan: 1Q, 2Q GDP Figures Were Disappointing Kaplan: Dallas Fed Still Expects Full Year GDP of 2% Due to Solid Consumer Demand Kaplan: Dallas Fed Expects Workforce Participation Rate To Go Down to 61% by 2024 Kaplan: Has Confidence Headline Inflation Will Reach 2% In The Medium Term Kaplan: China Future GDP Growth Rates Likely to Decline Kaplan: Brexit Impacts Will Take Time to Unfold Kaplan: Removal of Accomodation Should Be Done in 'Gradual and Patient Manner' Kaplan: There Has Been Significant Decline in Neutral Rate Of Interest Last Few Years Kaplan: Expects to see one hike this year Kaplan: Decline in Neutral Rates Makes Using Monetary Policy More Challenging Kaplan: Structural Reforms, Fiscal Policy Should Be Used to Help Economies
TVC:DXYLong
by QuantumLogicTrading
BUY USD DIPS VS GBP/ NZD: DOVISH FED W. DUDLEY SPEECH HIGHLIGHTSFed Dudley was speaking At A joint New York Fed, Indonesian Central Bank Seminar On Sunday evening when he left a mixed impression for the markets to digest - saying "it is premature to rule out an interest-rate increase this year" but then on the contrary saying "Raising Rates Prematurely Would Be Riskier Than Moving Slightly Too Late" and following up that sentiment with "Investor Expectations For Flatter Path Of U.S. Interest Rates Seems 'Broadly Appropriate'" and pointing out the medium-term risks are seen skewed to the downside - all of which somewhat contradictory expecting a 2016 rate hike. IMO these comments are more less positive news for the greenback, given the hawkish July Minutes should take precedent (despite the market weirdly selling the september hike being officially put on the table) and after the DXY lost every day last week I think it will struggle to continue this trend into this week as the drop in rate hike expectations/ fed funds rates should flatten out - Likely seeing the bulk of the dovish expectations price last week - september 25bps hike expectations fell from 25% at the beginning of the week to 12% on Friday following the miss GDP report - will likely bottom out around here to 8%min. That said, given the BOJ's miss we could easily see further pressure on US rates this week as imo the failed big stimulus hopes are likely to fade the risk-on environment of late, and move us back into the safe haven trend that has dominated 2016 - so dont be surprised to see some more risk-off rate expectation USD selling/ bond buying - look out for consecutive moves higher in UST or moves lower in tnx. In the medium term this still hasnt changed my view of bullish USD and at present IMO this selling wave has opened up the opp for some good USD buying entry points e.g. kiwi above 0.72, stelring at 1.33, and eur at 1.115 - kiwi and sterling the best trades as we move into RBA, BOE and RBNZ within the next 10 days which should realise considerable downside for kiwi and cable (and for those trading aussie too, tho i prefer the kiwi proxy). Fed Dudley Speech Highlights: -Fed's Dudley Warns It Is Premature To Rule Out an Interest-Rate Increase This Year -Dudley Says Fed-Funds Futures Prices Seem 'Too Complacent' -Dudley Says There Is 'Room For Improvement' in Fed Communications, But They Are Growing More Transparent -Dudley Says His Baseline Outlook For U.S. Growth, Inflation 'Has Not Changed Much In Recent Months' -Dudley Expects 2% Annualized U.S. Growth Over Next 18 Months -Fed's Dudley Says Medium-Term Risks To Economy Are 'Somewhat Skewed To The Down Side' -Dudley Says Brexit Impact Has Been Short Lived, But Longer Term Potential Fallout 'Hard To Gauge' -Dudley Says Fed Takes Dollar Appreciation Into Consideration, But Not Targeting Any Set Exchange Value -Dudley Says Evidence Accumulating The Crisis-Era Headwinds 'Are Likely To Prove More Persistent' -Fed's Dudley Warns it is Premature to Rule out an Interest-Rate Increase This Year -Dudley: Investor Expectations For Flatter Path Of U.S. Interest Rates Seems 'Broadly Appropriate' -Dudley Says Raising Rates Prematurely Would Be Riskier Than Moving Slightly Too Late
TVC:DXYLong
by QuantumLogicTrading
5
SPX: BOJ MISS = BULL RUN END +2% + 2016 SAFE HAVEN TREND RESUMESEnd of the bull run Global Equity Indexes: 1. SPX/ Global Equity indexes in the past 2/3wks saw a post-brexit central bank easing induced rally, as many CB released dovish statements following the vote which spurred investor confidence in fresh easing. - IMO much of the bull run was based on BOJ easing hopes, given the size of the economy (4th largest) stimulus from the BOJ had risk sentiment increasing affects - though now in light of no new easing from the BOJ and many CBs shrugging off/ UK internalising the brexit impacts I believe this bull run is over. 2. Technically speaking we may see another week or two of sideways or +1% as the market awaits easing policy information from the BOE (6th largest economy), but past this and regardless of what the BOE does i think the upside bias will cease. BOE is only likely to inject 50bn over probably 6m+ which is a drop in the ocean relatively as the BOJ does 100bn+ in one month, so by mid august latest I expect risk-markets to turn sour and a 10% correction is likely. Confirmation the risk-rally is over: - During this bull run we have seen risk markets/ SPX make gains rather frigidly, one day up one day down has been the trend - rather than the usual breakout green green green rallies of the past - this to me indicated that the topside was cautious and reinforced my view that it was central bank driven (not equity market performance driven). Thus, Confirmation of the trend turning to risk-off will be consecutive days of risk markets falling (SPX/ global indexes) OR consecutive safe haven markets rising (Gold, UST, Yen) and the emergence of a strong negative correlation between the two assets will be a solid second indicator that the 2016 risk-off trend is back. Trading Strategy - a number of ways to play this one: 1. Short FTSE100 @6700 or 7000 (wait for BOE) - this is my favourite trade but has a few conditions. We have built some resistance at the 6700-800 level so here isn't a bad place to sell however i think we will get a better selling vantage point next week, assuming the BOE cut the bank rate 25bps. - The BOE easing should move FTSE100 up 3-4% in a few days into the 7000 ATH key level as easing boosts business conditions and a lower GBP increases FTSE company international competitiveness. The 7000 level is where I am aiming for FTSE shorts with sell-limit orders as 1) its all time high levels; 2) I like to fade central bank action since it is artifical; 3) the broader risk-run is over so FTSE will suffer with the rest of the market 2. Short US Indexes @Market - SPX is perhaps the best short ATM given it trades right at its newly set all time high levels and on the backdrop of the BOJ miss we should see some downside soon. 3. Long Yen @mrkt - in the immediate term my favourite trade I like long Yen (for 200-400pips) against USD and GBP, given the BOJ backdrop is most related to JPY markets. We have already we seen the risk-off transmission taking place in here as Nikkei sold off 2% after the result and JPY grew 3% but i still think in the immediate term e.g. 1wk we can see more JPY topside and Nikkei weakness - me prefering to trade the FX strength over the equity as the equity often follows as a function of FX strength. 4. Long Bonds or Gold @mrkt - for the medium/ longer term I like buying govt debt, particularly UK gilts (BOE QE increases demand) or Gold - Gold we saw move higher on Friday in reaction to the BOJ so it will be interesting to see if we can get risk-off confirmation run from this next week (look for 3/4 green days). Risks to the view: 1. US Earnings have outperformed imo on average this Q, so the risk-run may be sustained for longer than the 2wk window that I expect. Nonetheless, i think even this is capped at 4wks e.g. we should be in full bear mode by the start of September - look out for the confirmation, a run of 3/4+ days of consecutive safe haven gains is often all the markets have to signal to show
TVC:SPXShort
by QuantumLogicTrading
6
NZDUSD: TECHNICAL ANALYSIS - 0.70 RES, MA, STDEV, IV=HV & RR NZD$ Technical analysis - Remain bearish below 0.70 - 0.69tp1 0.68tp2 on a rate cut (Aug 10th): Key level close: 1. On the daily and weekly we closed at the strongest pivot point of recent times at 0.70 - this is very bearish as historically this is the strongest level (lower than post brexit). MA: 1. We trade below the 4wk and 3m MA - this is a bearish indication + we are finding some support at the 3m moving average where price currently sits, though NZD$ looks to try and push lower with daily candles skewing their spikes to the downside. We have been above the 6m MA since June which sits at 0.69 and likely offers our next bearish support once we break the 3m MA. IV/ HV: 1. Realised Vols have also unsurprisingly aggressively come off in recent days, likely a function of the RBNZ rhetoric fading. Plus Implied vols are seen steeper in the 1wk and flatter in the 2wk-1m - with 1wk, 2wk and 1m Implied vols trade at 13.12%, 12.66%, 13.09% vs HV 1wk 2wk 1m at 10.90%, 15.60%, 14.58% - this mixture between HV and IV shows there has been considerable volatility drivers in the past/ future which are causing the curves to converge and diverge in no particular direction e.g. brexit, RBNZ hawkish/ dovish comments, future rate expectations - which all distort the interaction between HV and IV. Deviation Channels/ Support levels: 1. We Trade near to the bottom of the 6m deviation channel at 0.69 as NZD economic assessment asserts downside pressure on the pair, nonetheless but we could see support here as 0.69 is also a price action support level. Looking at the 12m SD channel, we are trading just below the average price at 0.703 - hence there is definitely more room for downside and we have just crossed the middle regression line implying we are entering some downside deviation now, with the 12m -2SD resistance level at 0.675 which is in line with the price support level at 0.68 which is where i think we will head after the RBNZ announces a 25bps cut.. Risk-Reversals 1. 25 delta Risk reversals trade marginally bearish for NZD$, with current at -0.2, 1wks at -0.3 and 2wks at -0.6 and 1m at -0.95 - this suggest the NZD$ has a slight downside bias which concurs with the RBNZ's dovish stance and committment to cutting rates that was made clear in the July economic assesment (see attached). - 3m risk reversals trade with a similar downside bias to the 1m at -1 which shows the market expects extended NZD$ downside, likely a function of further rate cut expectations from the RBNZ. *Check the attached posts for indepth fundamentals*
Short
by QuantumLogicTrading
NZDUSD SHORT UPDATE: EYE RBNZ GOV G. WHEELER SPEECH CLOSELY!The Govenor of the RBNZ is speaking in 16 hours time - there could be significant up/ downside volatility in Kiwi - as we have seen after the past 3wks where the RBNZ have gone through the full hawk-dove cycle in their inferences/ rhetoric. We had RBNZ Spencer's comments on house inflation back on the 7th of July which wrote off an RBNZ OCR cut - sending kiwi$ to 12m highs, then we had the RBNZ announce an Emergency economic assessment which was a dovish move - then the assessment itself was extremely dovish and reassured markets that the RBNZ would cut the OCR citing Kiwi strength/ persisting low inflation as the drivers, bringing us round circle and push kiwi to 0.69lows . RBNZ G Wheeler likely comments 1. IMO he is likely to discuss the marcoprudential policies the RBNZ can use to tame the house price inflation in NZD, in an attempt to assure markets that it isnt over looking the houseflation issues in NZD post their economic assesment which ssaid they would cut the OCR (which would potentially make the HPI situation worse) - discussing or implementing new restrictive Macropru would be hawkish but likely over seen by the OCR cut. 2. IMO Wheeler will reiterate findings from the economic assesment e.g. high NZD price, low inflation and the need to cut the OCR - this will be heavily dovish and should send kiwi$ to the 0.6900 level if not towards 0.6800 if he really emphasised the inevitability of the OCR cut in August. Risks to the view: 1. Obvious risk to this view is 1) Wheeler back tracks on the economic assessment, follows Spencers tune from July 7th and undermines the need to cut the OCR - either in itself or as a function of the HPI situation. - Any inferences that the RBNZ/ Gov Wheeler IS NOT backing the cut/ economic assesment findings and kiwi will likely bounce to 0.72 immediately, and back to the 0.73 highs within the week. - there is still 2wks until their rate decision/ meeting on the 10th of August so there is still room for Wheeler to talk hawkish/ throw another spanner in the work before actually making the decision. Trading Strategy: 1. As above - any hawkish sentiment that moves us higher/ rallies kiwi I will sell into as i believe fundamentally the RBNZ has called its hand and anything between now and the 10th is noise - its best to wait for the information to full price e.g. to 0.72 but if momentum slowed near 0.71 I will sell there. - I dont have any interest buying any hawkishness or selling any dovishness at these levels - I will only sell 0.71+ pull backs as i think the rate cut is imminent and any hawkishness is just the RBNZ trying to keep the markets on its toes - Technically we are seeing some downside deviation + MA support - with kiwi$ trading on its 3m -2SD channel line and 3m Moving Average line, this looks supportive, with kiwi$ posting a green day once it hit hit these two techncials (as you can see highlighted in red) - this could continue to support a hawkish bounce, which is good for re-shorts. Eyes on the comments closely! *Any questions please let me know - I will be providing RBNZ Gov Wheeler Highlights ASAP*
Short
by QuantumLogicTrading
2
SHORT NZDUSD: GOLDMAN SACHS FORECASTS 0.68, 0.64, 0.62 GOLDMAN SACHS EXPECT 3 RBNZ RATE CUTS OF 25BP APIECE IN AUG, NOV AND MAR. In a scheduled "Economic Update" published on Thursday, the RBNZ signalled a significant strengthening in its easing bias, and dovish shift across its views on domestic inflation and domestic/global growth. At the heart of many of these changes is renewed concern about the elevated NZD. In our view, these changes make clear that the RBNZ is positioning for a deeper easing cycle, notwithstanding ongoing risks to financial stability from rising house prices. NZDUSD Targets: - 3 Month: 0.68 - 6 Month: 0.64 - 12 Month 0.62 This is largely inline with my previous posts/ reaffirms my short view of NZD$ - especially with the possibility of 50bps of cuts increasing for this year (GS citing two cuts); Plus I also see increased USD strength over the medium term as rate hike expectations/ implied probabilities ever grow - Fed Funds Futures Opt Implied probs now trade at 19.5% for Sept, 20.8% Nove and 40% for Dec, up from yesterday at 18.8, 20 an 39.8 - the firsk-on bias already started today will likely see these probabilities continue to strengthen until the end of the day. The Probability of 2 hikes this year is also becoming an ever stronger possibility with 2 hikes pricing at 7.5% in Dec - and with July Pricing a hike for the first time since Brexit at 2.4%
Short
by QuantumLogicTrading
2
SHORT NZDUSD: RBNZ DOVISH ECONOMIC ASSESSMENT HIGHLIGHTSThe RBNZ was dovish in their economic assesment and IMO used it to communicate their 100% commitment to a OCR cut. Key drivers of this view were quotes such as "futher policy easing will be required, and monetary policy will remain accomodative.", "NZD currency strength makes it difficult to hit target inflation" and "NZD exachange rate is too high stronger NZD implies inflation outlook will be weak" So clearly there is no illusion as to the RBNZ's August 10th decision. Perhaps the only question, given the extensiveness of the dovish rhetoic/ comments is how much will the RBNZ cut? could it be 50bps rather than than the usual 25bps given how aggressively dovish they have came out on the record. Trading Strategy: 1. From current levels there is little interest in adding fresh shorts - shorts still standing from 0.72/3 are firm and should be held. A 25bps cut IMO will take NZDUSD to 0.68TP and a 50bps cut, with the shock pricing it even lower, likely to 0.65/4. 2. Risks to this downside view continue to be RBNZ driven. As we have seen in the past 2wks Kiwi has traded at the mercy of the RBNZ - 2wks ago when the OCR rate cut initially began to price us to 0.70, the RBNZ came on record talking about kiwi house prices limiting the ability to cut the OCR which caused NZD$ to rally back to 12m highs, where then a week later, the RBNZ announced their emergency "economic assesment" which completely flipped the script back on the dovish side - now this week the assesment has been released and is dovish with the rate hike being price now. - But in the 3wks between now and the rate decision, im sure there is a level for more RBNZ comments to conflict this dovish sentiment. RBNZ Economic Assessment Highlights: -RBNZ: Further Policy Easing Likely -RBNZ: Will Continue to Watch Emerging Flow of Data -RBNZ: House Price Inflation Excessive -RBNZ: Bank Lending Curbs Aim To Limit Financial Sector Instability -RBNZ: Many Uncertainties Around Outlook -RBNZ: High New Zealand Dollar Adding To Headiwinds For Dairy, Manufacturing -RBNZ: High NZ Dollar Makes It Harder To Achieve Inflation Target
Short
by QuantumLogicTrading
2
NZDJPY: Potential downtrend continuationThe gap up gave a tighter entry in this pair. If you didn't short at market open, you can enter on a break of Friday's close or Friday's low, or at market, depending on your risk appetite. Stop loss should be as depicted on chart. If we break down with sufficient force, the monthly downtrend target on chart might get hit. If this downtrend is to pan out, we'll be returning to a monthly uptrend mode below, which acts as a magnetic level, once the level above is broken down convincingly. I like how the price action around the previous RBNZ rate cuts has given us clear indications of where the range would get capped, and it seems to be the case once again. Check out my updated track record here: pastebin.com If interested in my real time whatsapp alerts and swing trading newsletter, or in personal tuition, contact me privately. I'm offering a considerable discount on a packaged course which includes access to my private trading signals list for a year. Cheers! Ivan Labrie Link to Tim West's chatroom: www.tradingview.com We discuss setups like this often there. Feel free to stop by and subscribe to his indicator pack. If you have any questions ask. Risk disclaimer: My analysis is provided as general market commentary and does not constitute investment advice. I will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
Short
by IvanLabrie
SELL NZDUSD: EYES ON CPI PRINT 23:45GMT - >0.5%=0.73; <0.4%=0.67Short NZDUSD based on low CPI/ inflation = an RBNZ OCR cut is 90% likely - 105 mins after market open at 23:45GMT NZD releases their June CPI print. - In all RBNZ mandates they reiterate how they consider CPI to be their "main/ sole" target or dictator of the monetary policy they set (check any of their minutes etc). - Their target is 2%, plus recently they announced that they would hold an "emergency"/ brought forward economic assessment (this lead to increased short bets on NZD$ at the back of last week (with NZD$ falling from 0.733 to 0.710) as many speculated that this meant the RBNZ has a heads up on the CPI print - e.g. its bad). - See here for more details on NZD CPI and likelihood of a RBNZ OCR cut: www.bloomberg.com - In simple terms if CPI fails to grow on the quarter for NZD e.g. 0.4% or has in fact fallen e.g. 0.3% or less - it is highly likely that the RBNZ will cut their OCR rate, in order to boost the CPI, which in turn will send NZD$ likely to a terminal rate of 0.67 (could be as much as 0.65), hence why last week we saw shorts increase on the pair as fast money tries to front run the market/ print. Trading Strategy - Short NZD$ if CPI print misses or equals 0.4% - Stagnant/ low Inflation = RBNZ OCR cut likely: 1. Personally I dont have any interest in playing the long kiwi$ side e.g. if the print is higher as; 1) the RBNZ isnt happy with NZD trading so well (due to its deflationairy pressures), so action could come to reduce the NZD. 2) There is approximately 300-400pips of downside from here (at least) if a RBNZ OCR cut comes, whereas a no cut will likely see NZD$ Drift to 0.73 (maybe higher) so the risk:reward complex isn't as attractive to the upside IMO. 2. I will be waiting for the CPI print at 23:45GMT - if it is lower or equal to 0.4% I will Short NZDUSD 2lot@Market price; 0.68TP1 0.67TP2 0.65TP3 . 3. This trade is effectively betting on an RBNZ OCR rate cut; See attached posts for more details but this is already highly likely - and IMO is a definite if CPI is 0.4% (even more so if it is lower). Ideally id love to see 0.3%. - The rate cut is ranked likely if CPI comes in at 0.4% or less because 1) Inflation is the RBNZ key target, so stagnation is what they have to avoid - a rate cut is the likely tool they'll use given they have one of the highest CB rates in the developed world; 2) the NZD dollar is very expensive across the board and the RBNZ have communicated their dismay regarding the strength of the currency (e.g. saying its very strong/ causing disinflationairy pressures) - so a OCR cut is also the likely response if the RBNZ wants to depreciate the NZD dollar against all of its trading partners; 3) An OCR cut will ease any of the Brexit Commonwealth Headwinds that may or may not drift into NZD's economy of negative impact - so as these 3 reasons are compounded I believe an OCR cut is made ever more highly (80-90%) likely thus bearish bets against NZDUSD make sense to me from here. 3. This CPI trade, if comes in on target (0.4% or less), is also good as LDN and NY session's will have 8-14 hours until they start - so you will be able to get ahead of the market/ mostof the largest FX flows. Though the Asia session will be in full swing so dont expect an easy ride - IMO fingers should be on the trigger to execute the short immediately if 0.4% or less is seen - NZDUSD will likely drop 200+pips in less than 30seconds if these figures are the case (if not even quicker). Any questions or comments please ask - reading the "sell nzdusd @0.73 - tp 700pips" post ive attached helps support this short Kiwi$ trade
Short
by QuantumLogicTrading
19
NZDUSD: Clear short at weekly resistanceNZDUSD has an interesting short setup in the making. If we break down from here I could see it retesting the weekly mode at 0.6721, as depicted on chart. You can enter shorts at market with stops above 0.72721, and risk 0.5-1% on it. Add after it moves 1 atr in profit. Check out my updated track record here: pastebin.com If interested in my real time whatsapp alerts and swing trading newsletter, or in personal tuition, contact me privately. I'm offering a considerable discount on a packaged course which includes access to my private trading signals list for a year. Cheers! Ivan Labrie Link to Tim West's chatroom: www.tradingview.com We discuss setups like this often there. Feel free to stop by and subscribe to his indicator pack. If you have any questions ask. Risk disclaimer: My analysis is provided as general market commentary and does not constitute investment advice. I will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance-0.38% on such information.
Short
by IvanLabrie
2