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  • #136,501
  • Aug 5, 2015 7:07am Aug 5, 2015 7:07am
Thanks for your answer Sisse.


About your post to MarianneOslo
[quote=sisse;8418628] ... ECB will only finish printing money (QE) in SEP 2016 !!! ...

And, moreover, ECB said September 2016 is a minimum. If inflation target is not reached (which will need strong improvements in the economy, without speaking about the price of the commo falling), ECB QE will last more. Hopefully for EZ economy, it's Draghi who drives now and not anymore the psychorigid Trichet.

But this very dovish politic from ECB may prevent FED from raising hikes as much as they would have done it in "normal" conditions. Below parity, US economy will suffer a lot. Things may need to get better and better in EZ to let FED keep on raising hikes to avoid an uncontrolled fall of EUR/USD.
  • #136,502
  • Aug 5, 2015 7:42am Aug 5, 2015 7:42am
A slight miss in the headline and in the revision opening a wide intraday range in play for NFP. Both 1.082x floor and 1.096x/8x naked for an intraday test. 1.088x is flip zone till further data. Top side with priority until Europe goes home....

Not much to do in the euro at these levels. NY opening range will settle the day...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #136,503
  • Aug 5, 2015 8:38am Aug 5, 2015 8:38am
Quoting MarianneOslo
... ...I do not understand why US and UK are talking abouth rate hike with all the problems we are surrending at the moment. If they do it is a big mistake. Now the investments goes to Europe and Asia with lower currencies. US and UK will suffer with a higher currency.
You may want to read some macro books that explain the impact in the economy of extended period of low or high rates. Don't forget also that we have never have in the history of CBs such a long period of low rates...

A basic analogy that can help you quickly understand the point (i am assuming you drive) is why COASTING is so dangerous:

Coasting: describes a vehicle travelling in neutral or with the clutch pressed down.

Whatever the driving conditions its very dangerous and even illegal in most develop countries because it reduces driver control:

  1. engine braking is eliminated (productivity)
  2. vehicle speed downhill will increase quickly (inflation)
  3. increased use of the footbrake can reduce its effectiveness (low rates doesn't translate in more business incentives after a while ...just bastards riding the pig)
  4. steering response will be affected particularly on bends and corners (CB lose all the weapon in the arsenal making them irresponsive to economic cycles or any exogenous externality)
  5. it may be more difficult to select the appropriate gear when needed (inflation targets and investment forecast lose north)
  6. and in some cases you may even loss the ability to break or stop the movement as wheels could move faster than the mechanics of the transmission (inflation can get out of control faster than you can even avoid ...once you crossed the line there is no way back point in the spiral).

sisse

Pending conversations? PM for a chat...I am mainly in OTM now
  • #136,504
  • Edited 9:52am Aug 5, 2015 9:28am | Edited 9:52am
Quoting sisse
{quote} Sure the best option on the table is sit tight and hold mid term swings...... Market is now loaded and ready to complete first mid term targets on NFP (1.073x with ext 1.066x). sisse
Sisse, quick Q: do you think that the sequence of the starts of the mid term rate hike swing across different assets is gonna be the same as it was with the preemptive (short term) swings?

gold =) oil =) equities =) dollar

Or may it be more simultaneous as it may have (hopefully) the same trigger?

Cuz to me it seems just from TA that gold is acting very similar to the situation when it was just above 1150 before the preemptive swing happened - getting compresed to the lower/supportive side (dead cat bounce?) + same reactivity to fundamentals. Seems its about almost ready to go =) Now the question is if its gonna go sonner then NFP or if its going to wait

Thank you

P.S.: funny to see how equities are completely ignoring this very nice manufacturing PMI print unlike all the other assets. Hope its their last dance before the party is over
  • #136,505
  • Aug 5, 2015 10:06am Aug 5, 2015 10:06am
Quoting chester123
{quote} Sisse, quick Q: do you think that the sequence of the starts of the mid term rate hike swing across different assets is gonna be the same as it was with the preemptive (short term) swings? gold =) oil =) equities =) dollar ...
No.

We are aligning for a real RMT leg not a preemptive one. Dollar will take the lead as it will get hit in all fronts. NFP for a first real chance of the play. If it doesn't flop we are ready to go....

On equities, yeap as expected, they were/are the ones to be trading this week until tomorrow when we enter in full rates mode with Super Thursday (damn British media...) ...we'll make a parenthesis to talk about the BOE later...for now euro like in the last few weeks hanging on the edge....

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #136,506
  • Aug 5, 2015 10:14am Aug 5, 2015 10:14am
Quoting sisse
NFP for a first real chance of the play. If it doesn't flop we are ready to go
http://www.tradingeconomics.com/unit...-farm-payrolls

218k is a softball gonna get popped for a dinger, I'd say 250k+
"If The Fool persists in his Folly he will become wise." - William Blake
  • #136,507
  • Aug 5, 2015 10:53am Aug 5, 2015 10:53am
Hate to be a hindsight merchant here but filled on the 1.093 test with the ADP miss, so the book isn't that light anymore. Gotta watch carefully, 1.082 still the last stand for the bulls before 1.073. Both can become academic with a serious NFP. All the same levels in play: 1.089 the choppy, intraday zone with 1.082 probably holding pre-NFP and I'm hoping I don't have my hands full with another 1.093 test or there's at least a decent buffer there before NFP.
  • #136,508
  • Edited 12:01pm Aug 5, 2015 10:57am | Edited 12:01pm
Quoting sisse
{quote} You may want to read some macro books that explain the impact in the economy of extended period of low or high rates. Don't forget also that we have never have in the history of CBs such a long period of low rates... A basic analogy that can help you quickly understand the point (i am assuming you drive) is why COASTING is so dangerous: Coasting: describes a vehicle travelling in neutral or with the clutch pressed down. Whatever the driving conditions its very dangerous and even illegal in most develop countries because it reduces driver...
At the moment there is no inflation at all . It must be a balanse between the currencies. One can not be too strong while the other so weak. The strong CHF have made many problems in Europen countries and for more than the swiss. A interest reduction didnt have any effect on the rate CHF or the SEK. It is more than the rate increase or reduction that makes the curriencies rise or decline.

The rates are low due to serious trobles in the economy and it s not over yet.
It is no right or wrong in this. Time will show.
  • #136,509
  • Aug 5, 2015 2:05pm Aug 5, 2015 2:05pm
Quoting The Fool
{quote} http://www.tradingeconomics.com/unit...-farm-payrolls 218k is a softball gonna get popped for a dinger, I'd say 250k+
Board is setting for a very good number... I am also expecting a strong number...

In any case, Oil again getting hammered and keep paying beautifully. We are entering in the yearly lows and within distance (...uff in a couple of weeks only) of the first mid term target ($41 handle). By far one of the trades of the summer so far (including as collateral CAD which has been clean and clear too with support of rates on top) .

Crouching time for OIL as a break below will unlock an extensive panic leg that will carry major implications across the world...

Quoting sisse
DAX as expected in full control of the session and paying nicely (for those trading or following the move 1160x first target tested). We wont go much further than that without US reports (hikes play) cleared ....
European Equities couldn't get much higher (DAX ended 1160x as expected), euro confirmed the wide range for NFP with 1.098x as only level in play, Gold in nothingness until hikes confirmation and US Equities very shy to go anywhere outside the range before Friday.

Despite all the key moves in play for Friday, we have a Major stop in between. Sterling and the UK in general hasn't been in the driver sit for a very very long time but tomorrow we have Supper Thursday coming and markets expectations are very high on the hikes front.

From today's close until the unusual long news report on BOE rates, Sterling will have the upper hand across the board...It has been a long time for an update on Cable but I think is worth to track it tomorrow ... my details later and a shout to those trading GBP more regularly to pop by and share some views ...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #136,510
  • Aug 5, 2015 3:08pm Aug 5, 2015 3:08pm
Quoting sisse
Crouching time for OIL as a break below will unlock an extensive panic leg that will carry major implications across the world...
you sweet talkin' devil, you......even if NFP prints 85k the oil rout will put a lid on risk assets
"If The Fool persists in his Folly he will become wise." - William Blake
  • #136,511
  • Aug 5, 2015 3:21pm Aug 5, 2015 3:21pm
Quoting The Fool
{quote} you sweet talkin' devil, you......even if NFP prints 85k the oil rout will put a lid on risk assets
MUTCD class the past two days....
  • #136,512
  • Aug 5, 2015 4:21pm Aug 5, 2015 4:21pm
Quoting Pharm0r
{quote} MUTCD class the past two days....
my condolences
"If The Fool persists in his Folly he will become wise." - William Blake
  • #136,513
  • Aug 5, 2015 4:28pm Aug 5, 2015 4:28pm
Quoting The Fool
{quote} my condolences
The summation of my 16 hours thus far......

cones are still orange. This is a relief.
  • #136,514
  • Aug 6, 2015 3:25am Aug 6, 2015 3:25am
Active opening range Europe but session will be pretty much over at the bottom of the hour.

All eyes on the UK today with potential super explosive combo in play. BOE for the first time will officially test a much better way to communicate monetary policy in my opinion with a triple combo (Rates, Inflation and Carney) that will extend for a couple of hours. More importantly, BOE officially could open the RMT season (rates mode trading).

A bit of unconventional update today because UK is in control for the day so FTSE and Sterling will be the benchmark until London goes home. Then the US will take full control for the KEY NFP/rates play. FTSE 673x is THE and ONLY LEVEL in play to unlock a first swing on rates to 610x... details on the BOE plays later.

For now tracking closely GOLD losing 108x floor (via UK hikes), and 0.698x in EG as they will serve as intraday benchmark for the board and plays later with reports ...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #136,515
  • Aug 6, 2015 6:01am Aug 6, 2015 6:01am
And here we go for KEY reports coming.

On the fundamental side 3 things to track:

 

  1. Rates votes. Anything more than 2 members voting for hikes will be very HAWKISH and will mark the start of RMT in the UK and will put hikes for late Q4 2015 / early Q1 2016. Anything else is back to Spring 2016.
  2. Inflation. Any increase of accelerate inflation expectations for next 2 quarters will prompt a more aggressive rate increases rather than the gradual expected from the FED. Which translate in a very hawkish BOE.
  3. Carney. He has been particular dull since took charge of the BOE and has refused to play down Sterling. Any changes in the speech to a more aggressive view on hawks will send shockwaves across the board.

​On the technical side:

  1. FTSE 673x is key and only level to track for a hawkish play to 610x. Any flop with a soft inflation report will unlock a test 7000.xx but pending NFP tomorrow that could spoil any rally.
  2. GU like always the ugly duckling. Horrible pair to trade given the rates circumstances. Hawkish open a direct easy play to the 1.580x handle until tomorrow FED. Failure and back to the bottom of chop zone 1,55xx

For the actual plays in FX all come from the good pairs and crossed. EG, GA, GCAD and to much lesser extend GJ has nice and wide exhaustion leg on hawkish BOE. My favourite choice EG 0.700x -> 06657xx but playing GA too (to 2.3186x)

GL all ...reports now ...

sisse

Pending conversations? PM for a chat...I am mainly in OTM now
  • #136,516
  • Aug 6, 2015 6:05am Aug 6, 2015 6:05am
Quoting sisse

  1. GU like always the ugly duckling. Horrible pair to trade given the rates circumstances. Hawkish open a direct easy play to the 1.580x handle until tomorrow FED. Failure and back to the bottom of chop zone 1,55xx [check]

Dovish on the vote front... 1.550x done ...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #136,517
  • Aug 6, 2015 6:13am Aug 6, 2015 6:13am
Quoting sisse
Any increase of accelerate inflation expectations for next 2 quarters will prompt a more aggressive rate increases rather than the gradual expected from the FED. Which translate in a very hawkish BOE. Carney. sisse
From a quick look at inf report it seems that even the inflation expectations softened a little for Q4 2015/Q1 2016.
  • #136,518
  • Aug 6, 2015 6:14am Aug 6, 2015 6:14am
Dovish on the inflation front ... rates back to late Q2 2016 ... that will pretty much kill the hawks for a while.


Back to square one. Carney with the last chance to change the outcome otherwise will have the 3rd strike (votes, inflation and Carney) that will put FTSE more inline with the EZ equities in the short term and Sterling also ready to receive a spank first with FED hikes.

Tacking Carney in a few, until then all dovish so wide chop guarantee ...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #136,519
  • Aug 6, 2015 10:10am Aug 6, 2015 10:10am
Quoting sisse
Dovish on the inflation front ... rates back to late Q2 2016 ... that will pretty much kill the hawks for a while. Back to square one. Carney with the last chance to change the outcome otherwise will have the 3rd strike (votes, inflation and Carney) that will put FTSE more inline with the EZ equities in the short term and Sterling also ready to receive a spank first with FED hikes. Tacking Carney in a few, until then all dovish so wide chop guarantee ... sisse
i dont expect a daily roll under 0900 figure for nfp play ... what would be your take for the roll and opening price for the event !

hoom
Get Rich or Die Tryin
  • #136,520
  • Aug 6, 2015 10:37am Aug 6, 2015 10:37am
Everytime there are expectaions for a coming rate hike it is getting delayed. it is always someting new. This time it is crashing commodities and strong GPB as the reason(which is a good reason)
The votes changed down from last time 1-0-8 from2-0-7.

The message is: yes, we will hike but not before we are certain that the negative impact from lower commodity prices and stronger GBP have abated. The above also means that to a certain degree the decision to hike or not is not really in BoE’s hands, at least for now.
If UK willnot have rate hike US will not eighter.
There must be a balanse between the currencies. Some can not be too strong while others are too weak. US suffer with the strong currency.
We will not see any rate hike this year nor in UK or in US. The first rate hike will come from UK i think.
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