Fx Thoughts : As Easy As Saying Penguin

Markets have been almost as easy as saying “penguins” for 2015 so far.

Yes, I am fixated on the “penguins” word since my son convinced me to watch this Benedict Cumberbatch (Internet’s Sexiest Man Alive) interview on BBC and found that he cannot say the word “penguins”, mispronouncing the word repeatedly in a wildlife documentary that he was narrating.

I can think of more people who mispronounce “fish soup” (fish shoop) in Singapore than people who cannot say “penguin”.

The DXY USD Index has gapped up in the new year to close in on its 10 year high.

dxy weeklyDXY Index 10 year weekly chart

Nothing major has been spared with only Gold and Silver gaining since the last day of 2014.


We are starting out the year as predicted by most of the strategists – a USD year, lower oil prices, lower inflation, expectations running high for stimulus packages out of the ECB and BoJ and strong economic numbers to emerge for Europe and the US as the oil price effects filter through.

I wonder if they can all say “penguin” ? Pretty enough to be Benedict Cumberbatch and unable to say the word for the life of him.

“Penguins” have given me doubts because it would appear everything is up in the air right now and the specs are ruling the game of fx.

The speculative accounts are calling the shots, looking at oil prices for example.


The positioning is not as dire as it seems to justify the prices in a 5 year time frame.

EUR and JPY positions are not as compellingly short as we would assume based on CFTC positioning reports, although the EUR shorts are building up to their 10 year lows, last seen in 2012.

It would be insane to call for a turn now though, even though most retail positions are short thanks to the good job that private banks are doing.

But we know one thing – it would be easy to disrupt the market as easy as it is to say “penguin” and I am taking chips off the table this week with the PMI’s, Fed minutes and US non farm payrolls this Friday.

My call is that the specs rule this week, it is a trading week and it would be easier to say “penguin” or “fish soup” into Friday.