tag:blogger.com,1999:blog-34323687.post3010017577671655122..comments2024-03-28T12:22:11.704+00:00Comments on Macro Man: Attempting to quantify the impact of sterling weaknessMacro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger18125tag:blogger.com,1999:blog-34323687.post-67977837402440459102016-10-12T22:29:41.364+01:002016-10-12T22:29:41.364+01:00@12yo HFM 7:26
Are you looking at the divergence o...@12yo HFM 7:26<br />Are you looking at the divergence on the FTSE to preempt sterling move and... Oh, nevermind - that be too easy. Skrnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-56930216992839943002016-10-12T22:24:16.150+01:002016-10-12T22:24:16.150+01:00Harry, just consider the FX - heres front month gi...Harry, just consider the FX - heres <a href="http://i.imgur.com/T3yxWBg.png" rel="nofollow">front month gilts in GBP vs USD</a>...Mr. Tnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-1680278105397938192016-10-12T20:06:16.629+01:002016-10-12T20:06:16.629+01:00Is this a crazy bet?
Only if it loses. Otherwise, ...<i> Is this a crazy bet?</i><br />Only if it loses. Otherwise, it's pure genius.<br /><br /><i>Would you guys ever consider a trade of this type with such wide stops?</i><br />Stops? Hahahaha....<br /><br />I'll leave the technical questions to my elders & betters. Peace out.<br /><br /><br /><br />12yo HFMnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-43369625577182362782016-10-12T19:44:56.682+01:002016-10-12T19:44:56.682+01:00Guys, I am from a sports betting background so bea...Guys, I am from a sports betting background so bear with me if this seems a bit basic...<br /><br />Am evaluating opening the following trade:<br /><br />Short gilts at around 127.20...<br /><br />stop loss at, say, 132.50 if it takes out historic highs...(staked to lose 10k in this scenario)<br /><br />take 50% profit it market hits below 107.50...ie testing 2014 lows...let rest ride and move up stops...<br /><br />geared sort of 4/1...<br /><br />basing levels on this chart, which I assume is a continuous front contract chart?<br /><br />http://uk.investing.com/rates-bonds/uk-gilt-streaming-chart<br /><br />Couple of questions: Is this a crazy bet? looking obviously for market to apeshit against UK government and for them to get trapped with tumbling currency and loosening purse strings...maybe helped by worldwide reflation trade and gloval sov selloff with gilts to lead the pack...<br /><br />Would you guys ever consider a trade of this type with such wide stops? Rarely see this sort of Rio trade mentioned here - is that because it's crazy?<br /><br />What would be the funding cost of rolling/carrying a position like this for a year? Would it be enormous and make the bet non viable? Are there option prices from which I could derive a implied indication of the % chance of one of these stops being hit within a 12 month time horizon? If so, how can I access this data without a bloomberg terminal?<br /><br />Is somebody trying this sort of strategy likely to go skint fast?<br /><br />Be lucky, Harry.<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-53438413788239783622016-10-12T19:26:58.468+01:002016-10-12T19:26:58.468+01:00Having a nap during the "Fomc lull", I n...Having a nap during the "Fomc lull", I need to get rested for the Sydney FX open, when GBP/USD will undoubtedly move 300-600 pips... 12yo HFMnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-81472729080419689562016-10-12T18:45:19.416+01:002016-10-12T18:45:19.416+01:00What's peoples view if UK goes on the path of ...What's peoples view if UK goes on the path of this "fiscal stimulus" which CBs all around have been screaming for what feels like an eon already? Will it be the pioneer going into the dark with others following and will this cause a general global rise in rates? It's just gut feeling but in the event of fiscal stimulus controlled by governments would at best cause some temporary impulse to growth since they never "invest" productively in the long term, but what happens in the short term following such announcements would be interesting. Similarly, excluding the fiscal stimulus, even if "only" UK import costs rise and cause a rapid inflation spike causing UK rates to go up as well, is it possible that it would be a contagious event in the West or only a localized event. But yeah if almost every asset class valuation is currently driven mainly by the low rate narrative I just figured it might be a relevant question.hipperhttps://www.blogger.com/profile/10934536233703452719noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-57501583285268846912016-10-12T17:41:00.227+01:002016-10-12T17:41:00.227+01:00I would wager that is what most are thinking. Howe...I would wager that is what most are thinking. However, what if minutes are really hawkish and it keeps going? Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-47060568742672274672016-10-12T17:39:23.563+01:002016-10-12T17:39:23.563+01:00Does anyone else feel like the yen is being bid as...Does anyone else feel like the yen is being bid as a risk aversion measure, however following the fed minutes today it will be sold?WidowMakernoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-46125094873094019072016-10-12T14:12:03.361+01:002016-10-12T14:12:03.361+01:0012yo you crack me up - this and yesterdays pnl sup...12yo you crack me up - this and yesterdays pnl support comment is classicPuntanoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-86326345423616325302016-10-12T14:01:27.427+01:002016-10-12T14:01:27.427+01:00Midday Fund Update:
Our attempts to 'hedge...Midday Fund Update:<br /><br />Our attempts to 'hedge' losses in US equity positions by buying EU equities met with limited success yesterday. This morning I met with our fund's risk manager who summed up our net position in the following immortal words, "Dude, I can't even...". Quite.<br /><br />However all is not lost; by reporting our fund's PnL in sterling, we have turned an unpleasant DD into a healthy YTD profit ;)12yo HFMnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-51082248184269108942016-10-12T13:31:05.475+01:002016-10-12T13:31:05.475+01:00washed: thats the problem of living in a democracy...washed: thats the problem of living in a democracy these days (que Winston churchill's US quote, but its really all developed market at this point), those rocking the boat pay the price, but get none of the rewards (the guy after you gets the acclaim after you get tossed over the side of the boat).Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-88748825170840367712016-10-12T12:42:53.990+01:002016-10-12T12:42:53.990+01:00Brexit the new risk to focus on, in addition to hi...Brexit the new risk to focus on, in addition to higher yields. <br /><br />BREXIT is currently a net negative to the financial markets, whereas in June, it was a net positive, as the overwhelmingly positive ancillary benefit of lower global bond yields outweighed the eventual headache of the eventual exit process. Now as yields relentlessly move higher, and exit looming (within the market's horizon attention span), BREXIT is just a big risk.<br /><br />http://crackerjackfinance.com/2016/10/pounded-brexit-risks-hit-markets/Crackerjack Financehttp://www.crackerjackfinance.comnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-37699826092031063602016-10-12T12:13:06.993+01:002016-10-12T12:13:06.993+01:00@12 yo - that article was a very good read - super...@12 yo - that article was a very good read - superstring macro!<br />I do find it comical that people still talk about the need for 'political solutions' as if its an abstraction - take a look around at the people who run the world and tell me which one of these clowns inspires confidence in pushing a major overhaul without the threat of a major crisis first. That is precisely why I am skeptical of the 'fiscal stimulus' idea - just because its the right solution doesn't mean it will happen without a catalyst. Wily Larry (Summers) is setting the stage for his appointment to the Clinton cabinet because he knows there will be a lot more talk about it in coming quarters.washedupnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-6171958586901735692016-10-12T12:04:51.400+01:002016-10-12T12:04:51.400+01:00Mr Wong - Have you given up betting on racing and ...Mr Wong - Have you given up betting on racing and moved to trading financial markets?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-45317396708643744822016-10-12T11:36:46.097+01:002016-10-12T11:36:46.097+01:00"But day to day price action certainly trades..."But day to day price action certainly trades as if macro/FX guys are hoping for a decent rally to sell...and not getting it."<br /><br />Macro Man - as somebody much less experienced in markets than you, might you be able to give a more spelled out explanation of what you can see in the price action that suggests to you that macro / fx guys are looking for a rally to sell and not getting it? As opposed to CTA's etc...when you are looking at the charts / tape, what do you look for that gives this away? do the big gaps reveal to you machines ? What are the tell tale signs?Mr Wong In-Running Trading Bloghttps://www.blogger.com/profile/08684327361194442120noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-71112444512580615662016-10-12T11:36:40.669+01:002016-10-12T11:36:40.669+01:00While I wait for my Dax/DB 'hedge' to add ...While I wait for my Dax/DB 'hedge' to add some much needed alpha to my PnL, this Pettis article on inequality/debt/trade balances is worth a read:<br /><br />http://www.handelszeitung.ch/blogs/free-lunch/we-clearly-want-political-redistribution-122123512yo HFMnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-56240335144843757412016-10-12T11:22:09.703+01:002016-10-12T11:22:09.703+01:00@MM - another big difference from the 90's is ...@MM - another big difference from the 90's is that the biggest implications of a weaker sterling are much more likely to be manifested through the asset channel, namely foreigners rushing to buy now 'cheaper' property, as well as Uk businesses and equities, and not increased business activity. the dismal science (!) is practically begging for a new theory that treats asset valuation and consumption/investments as working at cross purposes as far as monetary impacts go. The washed-up hypothesis stipulates that in a world with high leverage t the basic tenet of capitalism, i.e. the fiduciary responsibility of economic agents to capital providers, results in narrowly rational choices that favor return of capital, starve overall investment, and ultimately lower future productivity.<br />In short, the current conditions in the UK are more likely to result in stagflation rather than rapid growth.washedupnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-38191814991745011622016-10-12T07:29:39.053+01:002016-10-12T07:29:39.053+01:00I think you made a reasonable fist of trying to be...I think you made a reasonable fist of trying to be objective about the effects of currency on growth in the UK. In doing that you were primarily focussing on how it as worked in the past when in harness with monetary policy.<br />Personally, I think the usefulness of looking at growth this way ,at this time, will be less effective IF the UK changes tack and goes to fiscal policy as the primary driver. Let's face it enough central bankers have been shouting at goverments to do just that for quite sometime now. Perhaps now someone is actually listening?checkmatehttps://www.blogger.com/profile/03688082792316894545noreply@blogger.com