Monday, September 09, 2013

FX Coin Vortex

TMM's simple explanation as to why the BIS FX volumes appear to be so large. The FX market has become a coin vortex. It's just the same coin flying further around the electronic market before it finally finds a home.


amplitudeinthehouse said...

Sorry to hear your stuck in a shitsandwich cycle too..any ,all we have to do is get to Ascot, the eye is in!
Forget the other fella , let's pick up where the old man left off!

Pax Vobiscum

Anonymous said...

Long time lurking Johnny Retail says...

Tough times never last, but tough people do. Hang in there.

Thanks for all you've done on this blog. I've never had any insights worth sharing, but this blog has taught me an awful lot.

abee crombie said...

Was just looking at the equity melt up, Nasdaq particularly. Pretty narrow range of issues making new highs, not sure if that means we keep dragging the laggards up, but I wonder how long semi's and biotech can keep flying. Also in Europe rotation is in full force, sell the quality/staples.

I am not bearish but I'd be surprised to see INDU make new highs this year.

Copper not following SHCOMP. Green metal, like other commodities is done.

If tapering comes in at $10B reduction, does the bid come into bonds or do we have to wait until Q1-2014

Leftback said...

The Tiny Taper will be a Buy The News event, in bonds and also in REITs, especially if the tapering delta is restricted to Treasury purchases, as seems likely.

The reaction of equities is less clear. Sentiment and vol measures have been a good guide. Buy on increasing bearish sentiment and peaking/falling vol, then sell on complacency and vanishing vol.

Rinse and repeat, until something more interesting happens. The non-demise of Europe is becoming quite a story. All rather like US 2009-2010. Mean reversion can be a bitch for Mr Shorty.

Leftback said...

US JOLTS data was not great, guys. The US economy looks a lot better from the outside than it does from the inside.

Job Openings Fall

We have just had a big rate shock and a more minor gasoline price shock and they are probably going to have an effect on confidence. This is not the stuff that dreams are made of, chaps.

The small business survey guys are on top of it. #1 issue is usually weak customer demand. The report noted that credit is a "non-issue" for small businesses (b/c they have no need of credit to expand). Business investment plans were mixed and inflation readings were flat.

US economy better for large global exporters (Europe picking up) than for small domestics. Same as it ever was.....

abee crombie said...

Euro equities getting near or some cases above the 3 year resistance levels at the highs. Will be interesting to see if they power through or grind up.

No love for bond yet. We have been seeing some, shall we say interesting moves, which seems like ppl are selling indiscriminately. I think we probably dont get a turn for a bit but the yield is starting to look good on intermediate, short and even variable rate paper.

Where is Ms Wantanabe putting her money these days? I cant figure it out

Leftback said...

European equities starting to price in a recovery? Surely a few land mines to be cleared before we get there. The value of Spanish banking assets is still best expressed using multiples of √(-1), surely?

A little more love for Mr Bond after yesterdays' auction of 10s. Gold getting the finger. (ht: The Original).

Indiscriminate selling in credit = leverage begets (lack of) performance begets job insecurity, Abee? Usually darkest before the dawn....

Leftback said...

Gilts, Treasuries and bunds are all bid today, in the apparent absence of news. Any insights?

The only correlation that I can draw on of late is that a stronger JPY has been associated with buying of USTs, while the run-up in USDJPY was associated with a big dump of USTs.

But mainly we feel like Stan Druckenmiller. We don't have much idea what's going on, so we are not doing much:

Druckenmiller Sporting Teensy Positions

By the way, for those who enjoyed the Tapir video yesterday, the one in the front is called PIMCO.

amplitudeinthehouse said...

Insights?...looking around the markets I'd say Stanley call sounds about right to me..think back to the post " The Central Bankers give the Chinese Burn"....Landmines about surely, you ask? bet, the data is going in a thousand different directions with that one let me a sure'd be better trading the Danish Stock market , the day to day action in that circle of market players would make what we have witness around here the last year have you blush.
Oh , it's so good to be in single names again!

Anonymous said...

LOL LB @ tapirs.

Shocker data from EU MoM industrial production this week. However this is old July data and the manufacturing PMI's showing improvement in August, so the next MoM should be probably showing improvement as well.

In other news, NOK has done nicely after they shed off the phone business to MSFT. Perhaps the broad market are finally starting to realise what a burden it was....

New shells and better processors ain't gonna cut it. Non-innovation is squeezing the whole device market, and I think we can use history as a lecturer in this one. Just no new reasons anymore to renew your phone every year.

Probably AAPL is going to have a lesson that re-branding old stuff works only so long - as it works.

abee crombie said...

Cheers for the thoughts Anon. NOK is on a tear but I disagree slightly on AAPL. I think the fingerprint reader, if it is as simple as it looks and works well is a big feature. Security is key with mobile phones these days. Wait until you lose one and then you realize.

But overall I agree, mobile phones will be like PC's. The upgrade cycle will inevitably slow down.

Naughty EM current account deficit countries seems to have stabilized. Are they leading or lagging? Anyways does anything really matter until we get the Fed?