Comments
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JVoh my goodness the Chinese economic data is horrific
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BSDollar drops clearly correlated to risk off here... Look at the jumps at US open. Not what I was expecting...!! Thoughts anyone?
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CHI would like to know if Raoul has any comment regarding the ED trades and the impact of "surprise" cuts on the performance of the trade. Eg. if EDZ20 is priced at 3 rates cuts by year end but the Fed does a surprise 50bps cut by Monday followed by more cuts in June how has this scenario historically affected long ED positions?
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SHRaoul, Any update on our ED trades? Now ITM on the Dec 20 90 calls and rapidly closing in on the Dec 21 99.325 and 99.5 calls. Time to trim back or double down?
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EDAll the roads lead to a HIGHER dollar and LOWER Us rates. As Asian central banks are cutting rates in a effort to curb the devastating effects of COVID 2019, the USD strength will INEVITABLY import RoW deflation. The Fed will have no choice to CUT rates this year, which will provide relief to risk assets and strengthen even further the USD in a feedback loop. Déjà vu... Now while the market is JUST starting to realize that China’s “closure / embargo” needs to be seriously taken into account, the focus turns indeed to OUTSIDE China : North Korea / Japan / Thailand look extremely vulnerable to supply chain disruptions, not to mention tourism. I fully subscribe to Raoul’s view and hold the same investment themes + large short of the Thai BATH and HK USD as i think the peg is going to BREAK. Happy to discuss !
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amHi, are there any idea to capitalise on the very low implied vol in the FX markets?? it seems like a very easy opportunity, am I missing anything here? What sort of calls and pairs would work well in this setup? Thanks
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JLRaoul's fear thesis on coronavirus is starting to play out. Regardless of the disease's actual lethality or transmissibility (which could indeed be high,) the mass fear reaction is beginning to build its own powerful momentum with cascading knock-on effects. Travel steeply constricted, supply chain disruption is occurring, etc. Perhaps COVID-19 will turn out to be the agent that catalyzes the strangeness of the last ~3 to 4 years of market psychology from by turns grudging, complacent, or madly enthusiastic "buy the dip forever" bubble mentality into "sell the top, get out, run away." The TLT trade looks like it's starting to produce.
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DDThanks for the links Raoul, very helpful!
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BSBeen keeping my stop loss pretty tight on EUR/USD but not out yet... Can't help but feel like this is one of those moves that cuts through resistances like butter... Taking profits is always the hardest. Ugh. Thanks for the update Raoul.
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FOIn FX I’m looking at SEK/JPY, that looks very vulnerable with a support at 10.5 that’s held up until now. It’s just that if we have a major move in the EM market, the Swedish krona isn’t far off of breaking that support. I wouldn’t have spotted this without these brilliant reports. Keep up the good work!