Good morning,
Apologies up front for yesterday’s lack of communication but I forgot to mention on Wednesday that I would be travelling on business yesterday. Anyway yesterday we obviously had the BoE and ECB both out and both not changing a solitary thing. The BoE left the door open (sort of) to more QE down the road, while my friend and yours Mr. Trichet dodged questions about Greece like Keanu Reeves dodged bullets in The Matrix….
Headlines were the main highlight of the day and the persistent questions about whether or not Greece will survive the week and if Prudential really is going to buy the Asian arm of AIG kept hitting the market. Subsequently we saw both the EURUSD and Cable do a merry little dance only at the end of the day to end up roughly where they had originally started. I still hold the view that the Cable move is nothing but a corrective one and a little bit of a dead cat bounce especially in light of information overnight that the Singapore Wealth fund amongst others would be underwriting a massive chunk (if not all) of the Pru. deal.
Today the market sits nervously on pins and needles looking for the NFP data this afternoon, all of which is going to be messy thanks in large part to bad weather distorting the number as well as extra people being hired part time for the decade census event in the states. Any way you look at it I still like to think that the event risk will play into USD positive and we should see the greenback trade higher.
On my AUDNZD well what to say, yes I’ve been stopped out and no I don’t think I’m wrong! I still think this AUDUSD is overdone to the topside and I think that in a week where the NZDUSD has been the worst performing cross I’ve been short and caught. But on the other side I sell again (prop book) and look to make my money back.
It’s been a very long week and I hope that I have more inspiration for you next week after I’ve had some rest. Don’t ruin your Friday with a crappy trade today because it’s going to be ugly out there.
Best regards and a good weekend,
Ken Veksler.
05 března 2010
03 března 2010
03/03 Ken Veksler's Market Commentary
Good morning,
What a funny old market this really is. Pain to be had everywhere and a lot of punters are wearing it this morning. News and moves from overnight hitting the antipodeans first was the much better GDP data out of Australia which gives the AUD a bid tone but sold off nonetheless later in the session. My beleaguered AUDNZD is showing me some pain as a result but I maintain my resolve and now have a firm stop in place at the 1.3090 level. Elsewhere we had an article outlining the potential disaster that is the Prudential/AIG deal falling over after all has been said and done, on the back of that we see the Cable give back some of its recent losses despite rumors that Prudential had already hedged their FX exposure on the deal. Cable traded back to 1.5075 in a heartbeat cleaning out some weak last minute shorts. I think there is more upside to this Cable and the zone between 1.5050 and 1.5150 is a legitimate area to target. Please understand I’m not advocating being long on the contrary I target that zone to establish fresh shorts but in the interim I think we retrace as clearly people started getting on this trade late in the piece and won’t have the bottle to hold in a market that’s fast cleaning out against them.
The EURUSD caught a very bid tone overnight targeting once again the 1.3680 area of intermediate resistance. The rally only got as far as the 1.3650 area but still keeps a bid tone this morning as the market awaits leaks and headlines out of the Greek meeting where a new austerity package worth a rumored 4.5bn is to be announced including measures such as further pension freezes and higher duties on luxury items etc. Merkel is still vehemently denying offering any help, but I think that’s just to quell the disharmony amongst her constituents. On the day I look for the EURUSD to run higher and I look to fade rallies into 1.3680 and 1.3730. Remember the pivot is now 1.3840 and as long as we stay below that level we maintain the downward bias.
USDCAD maintains its range and I buy on dips into the 1.0280/0330 zone looking for a return into 1.0550 and above.
USDJPY…. Well you all know how I feel about this pair sell rallies into 90.30 and above.
On the data front keep an eye on Euro zone retail sales and further out the US ISM numbers this afternoon.
Best regards,
Ken Veksler.
What a funny old market this really is. Pain to be had everywhere and a lot of punters are wearing it this morning. News and moves from overnight hitting the antipodeans first was the much better GDP data out of Australia which gives the AUD a bid tone but sold off nonetheless later in the session. My beleaguered AUDNZD is showing me some pain as a result but I maintain my resolve and now have a firm stop in place at the 1.3090 level. Elsewhere we had an article outlining the potential disaster that is the Prudential/AIG deal falling over after all has been said and done, on the back of that we see the Cable give back some of its recent losses despite rumors that Prudential had already hedged their FX exposure on the deal. Cable traded back to 1.5075 in a heartbeat cleaning out some weak last minute shorts. I think there is more upside to this Cable and the zone between 1.5050 and 1.5150 is a legitimate area to target. Please understand I’m not advocating being long on the contrary I target that zone to establish fresh shorts but in the interim I think we retrace as clearly people started getting on this trade late in the piece and won’t have the bottle to hold in a market that’s fast cleaning out against them.
The EURUSD caught a very bid tone overnight targeting once again the 1.3680 area of intermediate resistance. The rally only got as far as the 1.3650 area but still keeps a bid tone this morning as the market awaits leaks and headlines out of the Greek meeting where a new austerity package worth a rumored 4.5bn is to be announced including measures such as further pension freezes and higher duties on luxury items etc. Merkel is still vehemently denying offering any help, but I think that’s just to quell the disharmony amongst her constituents. On the day I look for the EURUSD to run higher and I look to fade rallies into 1.3680 and 1.3730. Remember the pivot is now 1.3840 and as long as we stay below that level we maintain the downward bias.
USDCAD maintains its range and I buy on dips into the 1.0280/0330 zone looking for a return into 1.0550 and above.
USDJPY…. Well you all know how I feel about this pair sell rallies into 90.30 and above.
On the data front keep an eye on Euro zone retail sales and further out the US ISM numbers this afternoon.
Best regards,
Ken Veksler.
02 března 2010
Ken Veksler's Market Commentary
Good morning,
The RBA has gotten off the fence and moved 25bps higher taking the OCR to 4%. The accompanying statement was, just like the decision, “finely balanced” offering the market little more to go on than the fact that they are prepared and are on the road to normalizing and approaching the average rate target. To give an indication the average rate over the course of the last 20 or so years was roughly around 6.25% which gives you an indication of how much room is left. At this stage it’s likely that they don’t move at the April meeting and now sit waiting for the May decision. The AUDUSD was little moved on the news having been better bid after retails sales data released before the decision. On the announcement the AUD traded higher up to 0.9030 with only really a 40 pip move and was quickly sold down to overnight lows of around the 0.8960 mark. Building approvals data came in worse than expected and kept the AUDUSD capped for any further upside.
We come in this morning to see the AUDUSD better bid and having another run at the 0.9030 overnight high. I think the upside is limited for the time being and if 0.9030 were to break then 0.9080 should definitely cap any further upside. My AUDNZD has been higher this morning as a result and I’ve used this opportunity to sell more improving my current average to 1.2903. I remain resolute on this trade and would urge you to think about the fact that the previous (10yrs ago) all time high was 1.3015 so from that take what you will….
Elsewhere the Greek drama’s continue unabated and the EURUSD suffers as a result. Little to add on this front other than 1.3620/30 is a definite sell on the intraday moves higher and some weak stops sit below decent bids at 1.3500. 1.3450 now marks a critical level for this cross and if attacked one more time could see some pain unravel. On the day look for that level to hold though or at least until Merkel gives in and says that she will indeed help her Greek friends.
The other main story of the last 2 days is clearly the Cable and the woes aren’t likely to end anytime soon really. Punished is an understatement and taking the Prudential/AIG deal out of the equation there is still more pain on this thing to be worn for those long of it. On the day and for the week going forward I look for dirty bounces into 1.5050/5100 to be sold and target the next real level of any substance as 1.4740, although that really is a stretch at present.
Otherwise on the day we have the BOC announcement on rates and while they are expected to stay shtum on the move the commentary is likely to be more on the hawkish side of dovish and lend more support to the CAD. I look for 1.0380 to be broken on the day but ultimately 1.0330 to hold. I look to buy the cross on dips into the 1.0280/0330 area for a mean reversion return to 1.0550/0630.
The only other piece of data of note today is the Euro Zone flash CPI estimate which if anything should prove heavy for the cross.
Best regards,
Ken Veksler.
The RBA has gotten off the fence and moved 25bps higher taking the OCR to 4%. The accompanying statement was, just like the decision, “finely balanced” offering the market little more to go on than the fact that they are prepared and are on the road to normalizing and approaching the average rate target. To give an indication the average rate over the course of the last 20 or so years was roughly around 6.25% which gives you an indication of how much room is left. At this stage it’s likely that they don’t move at the April meeting and now sit waiting for the May decision. The AUDUSD was little moved on the news having been better bid after retails sales data released before the decision. On the announcement the AUD traded higher up to 0.9030 with only really a 40 pip move and was quickly sold down to overnight lows of around the 0.8960 mark. Building approvals data came in worse than expected and kept the AUDUSD capped for any further upside.
We come in this morning to see the AUDUSD better bid and having another run at the 0.9030 overnight high. I think the upside is limited for the time being and if 0.9030 were to break then 0.9080 should definitely cap any further upside. My AUDNZD has been higher this morning as a result and I’ve used this opportunity to sell more improving my current average to 1.2903. I remain resolute on this trade and would urge you to think about the fact that the previous (10yrs ago) all time high was 1.3015 so from that take what you will….
Elsewhere the Greek drama’s continue unabated and the EURUSD suffers as a result. Little to add on this front other than 1.3620/30 is a definite sell on the intraday moves higher and some weak stops sit below decent bids at 1.3500. 1.3450 now marks a critical level for this cross and if attacked one more time could see some pain unravel. On the day look for that level to hold though or at least until Merkel gives in and says that she will indeed help her Greek friends.
The other main story of the last 2 days is clearly the Cable and the woes aren’t likely to end anytime soon really. Punished is an understatement and taking the Prudential/AIG deal out of the equation there is still more pain on this thing to be worn for those long of it. On the day and for the week going forward I look for dirty bounces into 1.5050/5100 to be sold and target the next real level of any substance as 1.4740, although that really is a stretch at present.
Otherwise on the day we have the BOC announcement on rates and while they are expected to stay shtum on the move the commentary is likely to be more on the hawkish side of dovish and lend more support to the CAD. I look for 1.0380 to be broken on the day but ultimately 1.0330 to hold. I look to buy the cross on dips into the 1.0280/0330 area for a mean reversion return to 1.0550/0630.
The only other piece of data of note today is the Euro Zone flash CPI estimate which if anything should prove heavy for the cross.
Best regards,
Ken Veksler.
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