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Monthly Archives: June 2015

Alot of buzz in the media about Janet Yellen and FOMC tonight or rather 2am Singapore time.

Is she going to surprise with a rate hike?!

Market talk is July…………….September……………November………….take a dart and throw it on the board!

Personally, I don’t think she will surprise the market by hiking rates, although, I do believe she will shed some light on how she is going to access the US economic and interpret its projections going forward.  This should provide some clues as to when?!

Recently, she has been spending time talking about the world economy and how it’s not doing too well. While non farm payrolls has been trending above 200K, the last two months has been showing a slight downward movement despite the stronger number last month of 280K versus forecasts of 222K.

Housing is still a mixed bag of information.  Retail sales as well.

However, whatever Janet is going to say will provide CLARITY and that in itself will be USD positive.

Just checked to do a put option till Friday GBP and EUR averages about 80bps.  Am I prepared to gamble 80bps?

Let me think about it in the next few hours and update all of you.

Since I did the trade on Feb 25th, I did not see daylight, till late March when it peaked at 0.7897 and then came off again.

Another opportunity came on April 29th when it hit a high of 0.8063.  You will recall our breakeven was 0.8097 and the premium paid was 97bps.  At that time, I could just square off the trade and made a negligible loss, but I decided to hold on to the position after all, I still have another month to go.  After making the decision to hold off, the AUDUSD started coming off and high a bottom of 0.7811 on May 1st.

An opportunity came on May 13th when the AUDUSD hit 0.8116, I decided to square off the option by selling it. I made a very small profit of 19bps.

In reality after doing the trade in Feb, the onslaught thereafter of negative economic data out of Australia dashed by hopes of it ever recovering.  So, on balance, I am just happy to get out almost breakeven.

It peaked on May 14th at 0.8160 and thereafter, it was a landslide all the way down to the current 0.7689.


UK Claimant Count came out better at (6.50) versus expectations of (12.5).

GBPUSD, jumped 35 bps higher and holding at 1.5708.

I withdrew the OTM put spot order.

GBPUSD has been trending upwards the past week, while the EURUSD has been going the opposite direction.

I don’t believe the GBPUSD is sustainable and any negative economic data will see a significant reversal.

This time around will be a triple top; once on May 14th, another on May 22nd. Near this year’s high of 1.5780 on May 14th, happened once this year.

I am going to take a punt and do a OTM put trade: –

GBPUSD  –  Spot 1.5662; Stop if Offered at 1.5640 and SL at 1.5660

Let’s see what happens in the next few mins.

Did a GBPUSD trade hoping to catch some action on the release of the UK retail sales.  UK and BOE looking at economy closely; housing prices, retail sales, and services PMI are data that will be volatile.

I decided to do a straddle: –

GBPUSD  –  Spot at 1.5600, Long Stop if Bid at 1.5625 and Short Stop if Offered at 1.5575.

The data came out in favour of the UK at 1.2% stronger than forecast of 0.4%.

However, the GBP didn’t really move that much, so I squared the position at 1.5660 for a trading profit of 35bps.

Given that the Federal Reserve is poised at raising interest rates this year as stated by Janet Yellen, clearly, all eyes are on employment data, GDP growth and consumption.

Today’s non farm payroll numbers is strong or weak will be a market mover.  Wednesday’s ADP was an indication though a marginal one.

I decided to place my bets on a strong non farm payroll number and did a stop if offered sell EURUSD and GBPUSD with the following at 8:20pm: –

EURUSD  –  Spot at 1.1222, Sell Stop if Offered at 1.1190

GBPUSD  –  Spot at 1.5329, Sell Stop if Offered at 1.5300

The non farm payroll number came out strong at 280K verusus expectations of 222K.

EUR and GBP crashed.

I squared my positions half an hour later at 1.1100 and 1.5238 for a trading profit of 90bps and 62bps respectively.

Not bad!