Wednesday, October 03, 2012
Plan a) was to buy at last night's close. And we have, filling up on the small "just in case" purchases on Monday with more risk stuff. The path to getting to that "buy" though has been not quite what we were looking for so confidence isn't as great as it was when we planned plan a). But life is never easy.
Coming in this morning it would appear that the Australian trade data has shot to the top of the gloom league and coming after the RBA rate cut, the confidence that Australia is going down the Swann(ie) appears consensual. Our inboxes are full of deep analytics as to why Australia is doomed, blended with a melange of charts as to why everything Australian is doomed, suffused with articles on why the RBA is so behind (also why the AUS statistics office is so rubbish at keeping up with the times) and the whole lot bathed in a coulee of "Toldja so's" from every short term player on the street. So in TMM's eyes that is a full set.
It s been a long time since trade data has caused such a stir and TMM look back nostalgically to the days when US trade data was the highlight of the month, as opposed to today's young upstart of NFPs. The Australian stats was indeed a "shocker" and like the internals of much of the Aussie data, is turning sour. But despite all the shouting and shrieking this morning, Australia is not a Spain. On the face of it 5.5% unemployment and growth within trend (for now) hardly deserves some of the current calls for interest rates to fall as far as 2 to 2.5% which is effectively zero real rates.
The global risk platform doesn't look as though it's falling apart either and it would appear that the World ex Aus is not really that stressed today with European equities doing ok and even the Aussie favourite diggers Rio and BHP up from last night's closes. So if the Aud selling is not on global functions and it's solely local "It's rates mate" and future outlook, then why is AUD/NZD higher? For the NZD to take more of a bath overnight when the news is meant to be Aussiecentric smacks of something being out of line. TMM will do something suicidal and buy some AUD here with tight stops as we anticipate, once again, short term positions being taken on long term views being taken out to the old ball mill to be scrunched. And if they aren't by tomorrow ? But then hey, its a tight stop. We can wear it. Not very macro, but then we get the feeling there aren't many folks out there putting on really long term views and hanging on to them.
It's October and historically a time for grief and like a frightened cat on a hot tin knife edge playing tennis with hand grenades against a canine Federer wearing a tee shirt with "Don't Look Now" written on it being served balls by red cloaked dwarfs whilst Kruger chants "One, Two, Freddy's Coming For You"... we are pretty scared.
Especially as it's gone so so.. so... quiet..