Fundamental Trading Journal

Nice...…..on the Dow

https://www.tradingview.com/x/3DEdjj32/

Currently 114 pips on that sell on Cable at 1.2750

Smile flipped - less bearish

Pound seems over extended to other currencies - its just the other things that drove this back up

For 10 straight days the pound has rallied...
If anything is going to drive inflation back in the US its going to be a cheap dollar

So where are we at the moment:

UK:

Business opening up
Carry value still showing

US

Trump seems to be keeping quiet
Strong NFP figures - but a miss on CPI .01% CPI
Dollar has been given a kicking

Bonds still not too happy with equities....

Us Dollar right now

https://www.tradingview.com/x/r8HGPwLQ/

dollar with value

https://www.tradingview.com/x/0fvBqZ9v/

It almost smacks of Mario Draghi
The market was expecting a pull back on asset purchases
Obviously, Powell has form on this "we are a long way from neutral"- and so pushed out being dovish...
But its a marker

Got 340 pips on the Dow and currently up 60 pips on sell off on Cable

Sell off on equities and Cable still going.

The sell on equities was brewing since 8th June

https://www.marketwatch.com/story/th...day-2020-06-12

Bull Flat started to pull back
Loads of decent data releases this week - big bucks time.

China - outbreak of viral infections in Beijing - risk off (50 people infected)
Aus - (as China)
UK - opening up non essential shops....BOE meeting on Thursday..some concern about level of QE - so more likely to have neg risk on the pound Weds
US- re-opened states see rise in infections...….
Oil - further cuts agreed with Iraq

Astra Zenca confirmed that we will have a vaccine in September- so most of the population vaccinated by the end of the year.
Think that the driver will be when the vaccine works

Risk off atm...

Right next week - is bearish for equities according to they that know

https://www.zerohedge.com/markets/wh...ion-expiration

US credit markets agree.

But was thinking of a long on the Aussie on Sunday - as reckon Lowe will be bullish - need to do some homework.
Westpac are pretty good.

EU- The PMI estimates are really good.

Infections:

China has 158 people affected by COVID-19.
US infection rates are going up....
UK reducing lock down measures....by Brexit concerns remain (banks bearish on the pound)

The only thing is that close on the ES..... was not bearish
Front of the curve moved up...in the hours leading to the close...
So this tells me - they went buying into that close....on equities
The thing is if they want to short it - they will have to rally it up to the POC for some orders.

FA

Trump's rally - not good (low turn out)

Increase in infections in US - not good at all for Cable

Hong Kong issues and China/India - not great

Need to see what Lowe is likely to say later on...Unemployment used to be a main bug bear for the RBA

Interesting article on what to expect after Friday- more bearish bia

https://www.zerohedge.com/markets/wh...ion-expiration

Looking at the dollar it has further to go....

Tapering of bond buying by the Fed - not good......

Structurally equities look a sell

Looking at this - why would anyone be long on risk assets

But on Friday - equity buying at the close

Will we have to see if they change their view - on Friday they were bullish into that close

Even if they want to short equities - they will still need to buy it- so looks to be long

Any longs could turn over sellers - so more move up

Right here are thoughts

Bull flattener kicking off- probably for a day - and the eq marks off yesterday
If we get a rally lets see- potential shorts
Check at cash open
But lots of h..
oil ok

Cable- currently they are bearish
Struggling to break 38% retracement

MM on the 1.2510- picked up a long
stops at b/e +1.
targets- 50% or VWAP

Lots of trapped shorts though...

The plan is to be short dollar

Nice long on Cable at 1.2510-
Then a pullback for the US session - and off she went again.
From a valuation perspective
We are a decent high and the Au is selling....and the pfs

Shops are opening
There is an issue of an increase in the virus - but Boris is going to tell people to wear masks in shops

UK

Bearish views
Option guys a bit bearish on Cable atm.
Frost is going to have a meeting on Brexit next week
The UK - is now almost fully opened up...and I am not sure what else is there.
Growth forecast has been cut

Positive
Boris is talking about making masks mandatory in all shops from next week
BOE more hawkish than other central banks
CPI figures due on 15th - and these are really important.
CPI has been on a downward trajectory- and Andrew Bailey has said that they will only look at neg rates if inflation does not start improving. But the estimates - are not bad....And the other estimates are quite positive.
Tax cuts to be introduced by the Chancellor


pfs: still more upside potential- just tons of it- on monthly

Levels of interest
1.2512-1.2754
1.2394-1.2876
1.2593-1.2673
1.2546-1.2720

1.2550- slippy
1.2650- defended

Long term - there is so much upside potential on Cable

So where are we at:

Friday was a great day to sell UK the economy had opened up, the chancellor had given his talk on moving the economy forward I think on Wednesday so all the positive information was out there.

So it was a great seller news type trade

Over the weekend

Moody's downgraded the UK economy
Today we've given Huwaei the knock back so that's obviously not very good although that information is now being priced in- it lead to the decline today on the Pound - during the Asian and most of the London session
The rally was due to the move in equities
CPI figures that are due tomorrow. The estimate is higher than last month this will address the negative interest rates that Andrew Bailey was talking about.
All eyes are going to be on CPI.... so lets see.
atm - in the FI world everything is calm

Looking at the pound atm

China had a pop- about the Huawei situation
https://uk.reuters.com/article/uk-br...-idUKKCN24G0L4

If we can get a rally into the Aussie open - would be a nice sell.
The only thing that will drag the pound up is equities.
Plus on Friday there are going to be concerns about Brexit.
Skew wise - if I recall - it was slightly bearish have an error on the software ....so

atm - pound being dragged by risk on that's all- however - there was a lot of sell orders in and stops will be nailed.

Even though we did not get much of a buy - Asian traders still sold the pound