Here is wishing all our business friends, business associates, clients, investors and shareholders a Very Happy Chinese new Year.
We have stopped all business at HWH Inc., The Panthenon Group, Singapore 360 and absolutelypassionate till the end of this week.
We will resume business as usual on Monday, 23 February 2015.
January 23rd will be remembered as a day when there was not much in terms of economic data and yet through the day from Asian session into London session and then into the opening of the US session, AUDUSD, GBPUSD and EURUSD all lost more than 100bps through the day……………like a slow and steady grind!
Unfortunately, I was out playing golf and missed all the action!
Oh well, there will always be another day for trading opportunities.
After looking through my technicals, including Ichimoku, MA, Bollinger bands, and stochastics, I decided that there were two potential trades: –
1) Long AUDUSD; stop if offered at 0.9256 (Spot 0.9236) and SL at 0.9230
2) Long Gold, stop if offered at 1,295.00 (spot 1,283) SL at 1,275
By the following morning Singapore time, nothing happened in the AUD, so I took out the order. Guess what, my NY session, the AUD was at 0.9280!
My Gold order was triggered and it was LIVE, I followed the market till the NY session when it reached $1,305 and I decided to take profit at $1,303 for a trading profit of $8.
The carnage on the USD started last Thursday and the three currencies that battered the USD the most was the GBP, EUR and the AUD.
The question is whether it was warranted or not, or was it simply a case of fund flows? Or did the market move against the USD because the BOE, ECB and RBA moved from an accommodating stance to a neutral stance? Is that enough to move the market so significantly? I do not believe so.
Personally, I expected the other central banks to move to a neutral stance, given that the Federal Reserve has already begun cutting back QE by two tranches of $10Bn each from $85Bn to now $65Bn.
Is there an opportunity for the USD to take back some ground from the majors? Yes, I believe so, and it has started today with the GBP giving back about 60bps so far. I should have captured this opportunity since I felt so strongly about it.
Unfortunately, I was taken away to focus on my private equity business in a company I invested that is involved in the tocotrienol business.
The non farm payroll number certainly surprised the markets last Friday with a 74K print when the whole world was expecting a 196K estimate.
It gave forex traders the ammunition to beat up the USD and that they did, with all the majors gaining by one big figure.
Then articles started coming out in the press, speculating whether or not this is a simple blip or a precursor to a further weakening in the US labor market.
Personally, I believe the NFP numbers will usually experience anomalies during the winter months, when less people are working and less employers are employing…….all because of the weather. This winter is a harsh one in the U.S., and in Europe, therefore, I expect employment to be weaker in the next two months.
From Monday to Tuesday, the EUR and GBP started correcting and giving up gains from Friday, however, the AUD and JPY continued to grind higher against the USD. The AUD helped by the buoyant housing market, however, the structural economy is still weak. The JPY was alittle puzzling, but maybe, it’s a reversal from the long bull run the USD had against the JPY starting from 101.00 a month ago.
Chinese New Year is on January 31st and I will be busy with family affairs starting next week right up to the first day of Chinese New Year. Admittedly, I haven’t really jumped back on the trading chair since Christmas and I really need to in order to start the new year with a nice foundation.
I will be posting the November and December performance review shortly and an overall experiential feedback of 2013.
Hahahahahahahaha……………..look at what the CNY PMI and the US has done to the AUD. I honestly did not expect the AUD to weaken today the way it did.
You know what? I should have seen this coming if I had the time to look at the charts. Yesterday, the AUD fell by 100bps and this morning when I woke up it was a t 0.9225. Thank you Mario Draghi and the rumours floating about regarding the possibility of negative interest rates.
Well., guess what? Draghi just came out to comment that ‘people should not speculate that the ECB will implement negative interest rates’, the EUIR strengthened about 40bps to 1.3462.
Think about it for a moment, is there really a need for ECB to implement negative interest rates when it has an arsenal of other monetary policies available to implement and let’s not forget also fiscal policies.
Hi Everyone,
Sorry for the radio license the past week. I took a short holiday from Thursday, November 14th to Monday, November 18th with my wife to R & R.
You know, my gut was telling me that Janet Yellen would wave the flag of QE accommodation during her speech last Thursday night (Singapore time). However, it doesn’t matter as I was on holiday and wanted to TOTALLY switch off from any trading.
I will update you shortly on what I did on the AUD Put Option expiring November 22nd and a short call option done on the EURUSD today.
Well, as I expected last Thursday was a massacre on the USD by the other majors. The half baked solution carved out by the US was not surprising and yet at the same time so predictable.
It was time for the US to reopen the government offices, it simply could not continue this embarrassing situation. So now the government is reopened but it’s fate is shifted to January 15th, 2014.
I knew the Republicans and the Democrats would not come to an agreement regarding the increase in the debt ceiling limit and rather than to continue to push a bad situation, what do they do? Suspend it, or rather postpone it to February 7th, 2014, in the meantime, the US has a ‘carte blanche’ to keep on printing new monies to meeting all it’s obligations till next February!
What a way to go United States of America………………which is why the fx market decided to punish the US dollar and it did with a vengeance.
Lesson learnt; never bet on politics and politicians, better to wait till it’s over and then focus back on fundamentals and technicals.
The Americans are so into the theatrics, they just love Hollywood, they love to create a Wow factor at the 23rd hour 59th minute………good or bad.
I believe the debt ceiling limit will be raised again, why? Simply because it was raised twice before during the past 14 months; from US$14Tn to US$15Tn to US$16.9Tn. However, as responsible people in positions of power and responsibility, they just can’t simply raise it without giving the impression to the public and the world that they have grieved over finding a solution and ‘cracking their heads’, and finally, they have no choice but to resort to raising the limit again.
The basic government revenue model is flawed as the inflows is less than the outflows with each passing year. The government does not have any proactive revenues, all their revenue stream is the traditional passive; taxes and duties. Until they solve the basic revenue and expense model, the deficit will never be reduced, unless, there cutbacks in the outflows.
Today, the US credit rating is not in question so far, though both Fitch and Moodys have changed their view to ‘negative watch’ but still ‘AAA’. If the US doesn’t increase the debt ceiling limit, by the end of November when a huge sum of monies is required to pay for the coupon on the outstanding treasuries held by governments and central banks around the world, will not be honored. This will have a tsunami effect across global financial markets. Can the US really afford this to happen, let’s not forget that the backlash to the US will be greater than the pain caused by the US to the rest of the world. Can the US afford to have a credit rating downgrade? I do not believe so, the US will defend its AAA rating with its life. Let’s not forget that Japan and China has majority stake in all outstanding treasuries around the world. If they dump the treasuries, what will happen to the US?
The American people have been living off credit and borrowed monies for the past two decades, if there are going to be casualties, they can only blame themselves. I mean the US government is the biggest culprit of living beyond their means and running deficit for the past 10 years.
However, because the the huge uncertainty, it is nearly impossible to work out a strategic potential trade. Coming up with a risk adjusted trade idea based on fundamentals and or technicals is a better bet than betting on the whims and fancies of politicians……..we are guaranteed to lose………and lose big time.
I am born in the Year of the Tiger.
The Panthenon Investment Group 