Fx Thoughts : Muddy Murky Waters into Thanksgiving
Muddy Waters strikes again, shorting Superb Summit International (1228 HK), back to their habit of going after the “forests” companies, if anyone cares to remember what happened to Sino Forest back in 2011.
But China comes to the rescue with a rate cut on the 21st of Nov, so the stock should open higher ? when they come out of suspension (suspended on 20 Nov).
We are seeing the USD breakout as we speak with the DXY Index breaking a new high as the EUR finds no support after the super combo from Draghi and the PBoC.
Meanwhile the blizzards and polar vortex is good news as deaths are recorded in upstate New York which means that bad economic numbers going ahead will have a source for blame and the USD story can continue.
As far as I can see, the fx game is for the big boy currencies and the rest of the world is just going along the moves of the USD, EUR and JPY, not forgetting to thank the PBoC for the rally in risk assets, revival in commodities and commodity currencies and resurgence in EM.
Thanksgiving week (27 Nov) has always been marked by bull runs, hail, snow or blizzard, and the stock markets are doing just that. Interestingly, November and May are the only months that the USD has rallied consistently in for the past 5 years and nothing will derail that this year.
But the picture is getting a bit murky for me into December – new highs then what ?
This week is all about Europe and Japan with big economic data coming out starting Wednesday with UK GDP, US spending numbers, Japanese CPI (inflation !!!) and lots of stuff from the Eurozone, complete with speakers out of BoJ and the ECB.
24 Nov 2100 ECB Weidmann Speaks
0750 BOJ Oct 31 meeting minutes
0900 BOJ Governor Kuroda speaks
1800 Bundesbank Financial Stability Report
1800 BOE Mark Carney speaks
0930 BOJ Shirai speaks
1710 ECB Constancio speaks
1700 ECB Financial Stability Report
1930 ECB Draghi speaks
2015 ECB Weidmann speaks
1730 ECB Costa speaks
Noticeably absent are Fed speakers as we head into the Swiss Gold referendum this Sunday which will be followed by an action packed first week of December with central banks and PMI numbers from all over and the all important US Non Farm Payrolls.
If the US numbers manage to hold out for October and with the polar vortex to blame for November, it does look like nothing will stand in the USD’s way for the time being till the FOMC on the 18th of December.
My contrarian trade is to do nothing except stick to my USDJPY position with a cut loss at 120. https://tradehaven.net/market/fx/fx-thugs-and-jpy-funding-are-made-in-japan/
The waters are too muddy for me to make out anything clearly.