AUD/USD

Most have seen this but for those who have not reference below. GOLD AUD/USD Correlation (or lack there of)

http://www.forexfactory.com/showthre...84#post5959584

A non trader came on bloomberg saying $A will rise because metals are starting to pick up and they lead risk currencies. He obviously thinks running a few numbers is beneath him.. Again don't believe the hype GOLD does NOT follow AUD all the time on a direct basis and this cycle down is the perfect example. I will get a workup this weekend to further show the weeks action between the two.


Very tired, and happy to see this week come to a close I will see you all on Sunday I am going to go sleep now for 12 hours after being up in and out about 90+ hours


Tonight CNY Manuf. This will bode well for new entries on the Short if we beat marginally.

I think the Euro's current situation fits the general mold of Soros' framework but it's so discombobulated over there because of the lack of actual policy integration. With a single nation you could have the government legislate or just allow for the deleveraging process and let the CB and the market handle the rest. Over there, even if one government makes some strong policy steps, another government can wipe out any correction by falling short of targets or loading up their balance sheet. I think if they find a way towards integration of the financial services industry at the very least, but of course fiscally then things could start to look more like Soros' model and heal up.

Just this morning actually I think they've taken a step in the right direction by proposing that the ECB handles oversight of banking licenses. If handled right it could move the banking system in the Euro as a whole towards clear and consolidated oversight policy which they'll need if they ever want to address the insane bank debt/bad-loan imbalances between countries.

It looks like they're in for continued deleveraging, at least down the line with basel III and as long as the governments hold their nerve. I'd bet on it at this point unless something crappy happens like the CDU gets booted in Germany, Rajoy loses control, Hollande goes wacko with his social agenda, etc.

As far as devaluation I'd love to see them get down a little further but into the medium term (I think you might have mentioned this a page or two back) it's more likely that the devaluation will slow or stop without an effort from the ECB. Almost guaranteed of course if the Fed jumps to more easing.

Best case scenario for devaluation is that Germany and company allow the ECB to find it's balls and go with something like the recently talked about cap on yields or something more innovative along the lines of a QE, to make a conscious effort to bring down the currency. This would blow out the ECB's balance sheet but be great for the debtor countries (although the yield cap would only be effective in my opinion with solid centralized fiscal oversight, but that's a whole other post)

I'm going to be a safe and unashamedly cowardly speculator and hold out on any absolute prediction until we hear what the ECB comes out with next month, and how much the Euro governments will allow right now. I think that will allow traders to "take the temperature" of current administrations there and how much we can expect to see them get done over the next year or so.

Best case scenario and a nice clear long term trading picture would be aggressive policy action for integration from governments and strong, controlled intervention from the ECB. We'd get the weaker Euro for the next year or couple of years and probably some nice carry trades on the side

However, China orders to AUS prevail, - but when gold up, ASX200 UP , because so many big mining companies here.
Question if possible? - Will gold go above 1715 now ? I looked at large chart, and wonder why its going so crazy, i expected a retracement, (i guess if qe3 on - gold is up - but that seems unlikely now doesnt it?
VB

Great thanks every one. It was a pretty good month for me (thanks kiwis).
Nice week end and see you soon for a good green weeks and month !

Very bad news for Aud diffidently very big gap down on Monday morning.

CHINA PMI::::::::::
here is the report translated in English.
2 Cut's from the RBA just increased to 74% based on forward rates. Chart below also a pic of PMI over the last year (recovery second half looks unlikely)


China Logistics Information Center

China Logistics and Purchasing Federation, the of Services Survey Center of the National Bureau of Statistics released July manufacturing PMI was 50.1%, slightly down 0.1 percentage points from the previous month. The index is little drop in the production and construction of off-season, the current economy is gradually bottoming late stabilization trend will continue. However, the current demand is weak, the downward pressure of oversupply have not been eliminated.





From the 11 sub-indexes, ibid month, only the raw materials inventory index rebounded somewhat, the remaining index decreased to varying degrees. Downward trend highlights the finished goods inventory index fell to 4.3 percent, the index dropped to 48.0%, the remaining smaller index fell more in less than a percentage point.
The new orders index narrowed, demand stabilized. The new orders index was 49.0%, slightly less than 50%. Since March of this year, the index continued to decline in May fell by 4.7 percentage points, fell significantly narrowed in the last two months, the last month to 0.9 percent, reduced to only 0.2 percent in the month.
The finished goods inventory index decreased significantly speed up the process of de-stocking. The finished goods inventory index was 48.0%, down 4.3 percentage points from the previous month, and down outstanding potential. Two months before the index hit a high point since last December, more than 52% this month, down to less than 50% of the destocking process is significantly accelerated, and will help to improve market supply and demand relationship.
The rebound in small business, the microeconomic foundations tend to gradually turn for the better. Small businesses PMI Following last month, an increase of 2 percentage points this month, and an increase of 0.9 percentage points, to 48.1%. Medium-sized enterprises PMI 50.2 percent over the previous month, up 0.2 percentage points. The large enterprises PMI was 50.3%, 0.3 percentage point drop the previous month.
The basic raw material industry decline, but the equipment manufacturing, high-tech industry has maintained a good momentum of development. Ferrous metals, non-ferrous metals, chemical raw materials and chemical products manufacturing basic raw materials industry, PMI index was significantly lower than the average level of the country's manufacturing; electrical machinery and equipment manufacturing industry to maintain high steady last many months is maintained at about 55%; computer communication electronic equipment manufacturing industry is showing a rising trend.
The purchase price index fell to 41.0%, is roughly equal to the same January 2009, to accelerate the market price down, set aside for the macro-control policy, but also help to reduce the cost of raw materials. But part of the price of raw materials has dropped to a low level, affecting the operation and development of the industry, to be a cause for concern.
The near term, the high temperature and rainfall in August, infrastructure investment project construction schedule will be affected to some extent, the industrial enterprises of leave arrangements and equipment maintenance will also increase economic trends continue basing process. Entering the fourth quarter, the stable growth policy effects will appear, in the pattern of the overall stabilization, economic growth is expected to stabilize, coupled with a low base in the second half of last year, the economy may be a modest rebound, but the more obvious changes in the industrial structure. This overall development of the situation stabilized, the obvious structural changes and of structural adjustment, to steady growth, control inflation adapt.
The need to consolidate the basis of economic stabilization, some of the impact of the steady downward pressure on growth have not been eliminated, in particular the problem of excess production capacity no obvious ease, still need to pay close attention to. In July, the production index still down, but the new orders index remained relatively high level of 51.8%, 2.8 percentage points higher than the new orders index; still weak demand has picked up, especially with respect to the new export orders index for two consecutive months dropped to less than 50% post-export growth may be weaker; in some sectors, especially the industrial growth rate of raw materials continued to decline. These cases illustrate the downward pressure of economic development is still not completely eliminated, the macro-control should be based on adjusting the structure to the way the long-term goal, still need to be steady growth in a prominent position.

sell the pops next week

[quote=jplazard2;5976475]CHINA PMI::::::::::
here is the report translated in English.
2 Cut's from the RBA just increased to 74% based on forward rates. Chart below also a pic of PMI over the last year (recovery second half looks unlikely)

CASH RATE ON TUESDAY!

they are looking more forward to Nov/Dec but that would be nice..

You could be right,i think they just waiting to see what it is the outcome in Europe.

I think we all are even Ben. Either way short term this is not a strong argument to be a bull.
First BHP, CNY Manufacturing data, EUR/AUD AUD/USD percentage narrowing, And a somewhat broken AUD chart this will be hard to defend 1.0250 let alone 1.02.. We will have to see where we open.

Do u think that will have an impact on eur/usd? Are we still waiting for any more big news this weekend.

Honestly Based on s&p 500/ AUD/usd, OIL where due for a correction. I don't think it will be Like May's selloff but Septemeber will be a down month based off historical and correlation that is starting to diverge on various makets.

As For EUR/USD i made a chart on EUR/AUD AUD/USD EUR/USD that shows as flows come back into Euro's (slowly) we should grind higher into Draghi's meeting later next week. this will increase upward pressure on EUR/AUD causing AUD/USD to fall lower. As for Sunday tough to tell but I expect if /ES (s&p) futures opens or trades within the first couple hours below 1395 risk off across the board will be the main thing by NY open.

Very valuable info....have a good weekend and good luck on monday morning.

Same to you and best of luck on the open it should be a fun ride.

yeah should be i had fun last nite with Euro going and down like crazy

CDM,

Thank you for that response not only did you explain the more important issues and reforms they must take but you explained it so elequently. I don't think Bloomberg/WSJ could put this any better. Very solid analysis and you understand as I can see more than just charts and price levels. Thanks again and I look forwrd to more post of this caliber

For those wanting to know more about the driver for EURO heading into year end take a look at Cdm's view point it's spot on.
http://www.forexfactory.com/showthre...98#post5976298

OK now that Manufactureing has come out I am really signing off lol..Have a nice weekend all.

Thanks JPL, much appreciated.

Contraction at last on the PMI, should be an interesting Sunday night with Labor Day on Monday in the US.

Best of luck to everyone, particularly the longs out there.

I know that gold is considered the anti dollar. Even as the Australian dollar weakens, it is still a strong currency. What I mean is that the USD and Aussie dollar can weaken at the same time at different rates. And my guesstimate is that if people are anticipating QE down the road, they might want to start protecting their assest right now by investing in precious metals such as gold. Especially since the markets are unstable. Also, inflation hurts the bond market, so, if the RBA =Reserve Bank of Australia lowers their interest rate, investors might buy gold to hedge against inflation while Aussie is still going down because of lack of export to countries such as China.

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