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FOMC Tonight! Any surprise from Janet Yellen?!

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.

3 month AUDUSD Call Option expiring 29 May 2015

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.

Phew!

Withdraw GBPUSD OTM trade

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.

UK; Claimant Count and Unemployment

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.

Trade done on 21 May @ UK Retail Sales

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.

5 June @ Non farm payroll?!

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!

5 May @ RBA Rate Decision; to cut or not to cut rates???

Majority of the street expected the RBA to cut rates the last time and it didn’t, this time around, it’s expecting RBA to cut rates by 0.25% to 2%.

I decided to put a spread trade: –

AUDUSD  –  Stop if Bid at 0-.7890, Spot at 0.7852, Stop if Offered at 0.7820. SLs at 0.7870 and 0.7830

As it turned out, the RBA did cut interest rates by 0.25% to 2%, but what was more surprising was the chopiness in the spot rate.

I was triggered on both trades and also stopped out on both trades for a trading loss of 44bps.  Aarrggghhhh!

Oh well, S _ _ _ happens………..hahahahahahahasha.

29 April @ Advance GDP

The talk about the US is all about economic growth, employment, consumption, so GDP will be a data that will be eagerly looked at and will potentially be volatile.

I decided to do my spread trade going into the announcement: –

 

GBPUSD  –  Stop if Bid at 1.5410, Spot at 1.5380, Stop if Offered at 1.5250. SL at 1.5380 for both trades

EURUSD  –  Stop if Bid at 1.1050, Spot at 1.1026, Stop if Offered at 1.0990.  SL at 1.1026 for both trades

 

The Advance GDP came out very badly into negative territory and the previous month was revised downwards from 2.6% to 2.2%.

The USD got killed, I wished more, but the market move sufficiently.

I squared the EURUSD at 1.1165 for a trading profit of 115 bps

I squared the GBPUSD at 1.5478 for a trading profit of 68bps.

Not bad for a Wednesday night, thank you United States of America.

24 April @ Durable Goods

Crazy Singapore night!

Believing that durable good will be a volatile data, I decided to put a bid and offer spread trade on both the GBP and EUR as follows: –

 

GBPUSD  –  Stop if Bid at 1.5150, Spot at 1.5125, Stop if Offered at 1.5100

EURUSD  –  Stop if Bid at 1.0850, Spot at 1.0830, Stop if Offered at 1.0810

 

Market turned out to be dead boring…………..hardly moved.

I squared the positions 45 mins later flat!

GBPUSD – Claimant Change

Another potential labour data for the UK. 

I decided to do a spread trade:-

Long stop if bid 1.4990

Short stop if offered 1.4930

Spot was at 1.4960

Data came out favourable and GBP spiked up to 1.5044

Squared at 1.5040 for a trading profit of 50bps. 

I am done for the week!