tag:blogger.com,1999:blog-34323687.post3682818908465156344..comments2024-03-29T03:19:56.674+00:00Comments on Macro Man: The resistible force meets the movable objectMacro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger33125tag:blogger.com,1999:blog-34323687.post-34287820915163910342016-08-05T18:01:34.124+01:002016-08-05T18:01:34.124+01:00on NZD...
RBNZ in interim update 21 July
"Th...on NZD...<br /><br />RBNZ in interim update 21 July<br />"The high exchange rate is adding further pressure to the dairy and manufacturing sectors and, together with weak global inflation, is holding down tradable goods inflation. This makes it difficult for the Bank to meet its inflation objective. A decline in the exchange rate is needed"<br /><br />"Monetary policy will continue to be accommodative. At this stage it seems likely that further policy easing will be required to ensure that future average inflation settles near the middle of the target range."<br /><br />Trying to jaw down the FX at least<br /><br /><br /><br /><br />TraderJimhttps://www.blogger.com/profile/17870637335405087110noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-27242768845427471632016-08-05T08:49:06.330+01:002016-08-05T08:49:06.330+01:00"and a massive surge in FTSE."
1 1/2%, &..."and a massive surge in FTSE."<br />1 1/2%, "massive". What can I say, if this is your idea of "massive" we have a significant communication issue.checkmatehttps://www.blogger.com/profile/03688082792316894545noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-19948129300576909242016-08-05T06:18:44.926+01:002016-08-05T06:18:44.926+01:00Still seeing more dollar weakness to come
(I made...Still seeing more dollar weakness to come <br />(I made the euro 1.125 call, but as you know past results are not....)<br /><br />I faded rba targeting 7680/7730 area, will cut it before nfp as we are so close to the target and I expect a bit of dollar strenght to come from those levels but as I explain for nzd it's a fade for me if it happens.<br /><br />My favorite dollar long would still be against cad around 1.29 with oil at 43$ ideallyoutside tradingnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-21803410855662351302016-08-05T00:54:55.707+01:002016-08-05T00:54:55.707+01:00@Sigma, I wouldn't overstate the ftse or cable...@Sigma, I wouldn't overstate the ftse or cable moves. It's not like ftse is stronger, or cable weaker, than they were last week. <br /><br />What new experiments will arise from Jackson's arse at the end of the month?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-51332088852099000732016-08-05T00:37:11.411+01:002016-08-05T00:37:11.411+01:00LOL. One tends to worry when there are so many peo...LOL. One tends to worry when there are so many people who are so sure that certain things are going to (or not going to) happen. Sigma is misrepresenting both my intelligence level and my position on US fixed income. Let's keep it respectful, eh?<br /><br />Historically, as most regular MM readers will be aware, we have been long USTs, often when others were bearish (e.g. at a 4% 10y in 2010, you can look it up). Currently and recently we have found USTs to be essentially untradeable, and so have been neutral. Now if you look back on the charts for the last 2-3 months, you'll find we didn't miss out much there. In addition, we are not in fundamental disagreement on the projection for future US yields. In the deflationary environment that we are experiencing, it is quite likely that lower yields lie ahead, but perhaps not right at this moment.<br /><br />No Fed rate hike this year is indeed possible, or even probable. We are not in any way dependent on this happening, but we do like to bet modestly against overwhelming consensus, as for example last week when we went long yen into the BoJ meeting and profited handsomely from the resulting squeeze that generated a 3¥ surge.<br /><br />Look, you can arguably rule out a September hike, but it is not possible to rule out associated movements in the USD and in equities and commodities that might reflect an increased probability of a rate hike in the future. Remember this, younger punters, in this your moment of all-knowing and arrogant omnipotence: that central banks will almost always end up FOLLOWING the markets, despite their recent fantasies of being able to control all of them, all of the time. Forget this truism, and you may repent at your leisure.Leftbackhttps://www.blogger.com/profile/07728096415928915882noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-4042465674877248232016-08-05T00:02:00.570+01:002016-08-05T00:02:00.570+01:00@northshore
great link. thanks!
@northshore<br />great link. thanks! <br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-33319198693882138902016-08-04T23:12:16.772+01:002016-08-04T23:12:16.772+01:00@sigma - pretty sure bund yields had just turned n...@sigma - pretty sure bund yields had just turned negative when gross made the sell call last year, after which it proceeded to go to 70 bps before turning back around - of course ur rt in that its not been a stellar trade for bears if they kept it all along, but nowhere as painful as you seem to imagine.<br />Additionally, since you think there is an elaborate plot to weaken UST's ahead of buying them, you may want to check the history of how often the market does what these stalwarts want it to. If I were them and I liked treasuries, I'd just go buy some, and trust me there are some for sale every day at a price. <br /><br />@LB I think sigma is capturing the sentiment of the market quite correctly in that no one ever expects any rate hikes ever, including myself. This as the atlanta fed nowcasts 3.7% for Q3. I think for the 10y to sell off JGBs and bunds would need to sell off, and thats that - anything optimistic regarding US prospects just seems destined to flatten 2's/10's and maybe create a very weak rally in the dollar (if that). <br /><br /><br />washedupnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-13490995434587392172016-08-04T22:40:18.598+01:002016-08-04T22:40:18.598+01:00>> Expectations for the Fed are now not surp...>> Expectations for the Fed are now not surprisingly extremely low<br /><br />Still dreaming of a hike, my friend? 100bp on 5y UST represents a very, very high expectation for the FED, unjustifiably high. One year ago 5y gilts was trading at 120bp and now it is at 15bp.<br /><br />Yellen marveled at Carney today: a whopping dump in yields and GBP and a massive surge in FTSE. What a strong man - he beats losers from ECB, BoJ, RBA, and the rest. Yellen is not thinking of hikes now, she wants to cut! <br /><br />Of course, they will massage your ears, my friend, while Gross and Grundlach will invite you to sell USTs. They know that they are going to make a killing next year when FED cuts so they are quietly buying from you now.<br /><br />Do you remember Gross's call last year that bunds are the short of a lifetime, when bunds were around 70bp? They made a killing by buying bunds from guys like you after bunds yields rallied 100bp in less than one year. Go ahead, now sell them (and me of course) your USTs.<br /><br />NFP is a non event and the risk is asymmetric to USTs. For good numbers, the initial dump of USTs from algos will be promptly bought by Gross and Co. For bad numbers, you know what will happen. <br /><br />Btw, I need implied vols to rise otherwise my vol harvesting algo is starving - hard to find decent shorts. Vix was decimated today with flat S&P. VXX lost 30% last month (who would buy this crap anyway?).<br /><br />Risk-parity is back in force - indeed why to sell if there are so many buyers and money around and the leverage will juice up however small carry?<br />Sigmanoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-1302475829736744202016-08-04T21:27:53.979+01:002016-08-04T21:27:53.979+01:00We are thinking along the lines of a somewhat stro...We are thinking along the lines of a somewhat stronger dollar (and higher vol) for a short-term trade here. <br /><br />Expectations for the Fed are now not surprisingly extremely low, yet the initial claims data suggest that the employment numbers released tomorrow may once again be fairly strong, even if the economy is not. A hot number from the BLS (and we will also be watching hourly wages and hours worked especially closely) and then some Fedspeak in its wake would surely have the potential to alter the FX landscape, at least for a few days. September and December are now the only possible meetings for the Fed to move, so there is some potential for volatility to pick up in response to the siren song of the Lorelei Dame Janet, if only to once again be dashed on the rocks in September…..<br /><br />So in this light, we are giving our favorite strong yen trade a rest for a few days, and instead we are modestly short EURUSD, CADUSD and AUDUSD. Both of the latter have benefited from a squeeze recently that may now have run its course.<br /><br />Tomorrow morning looks likely to be a busy one. Consensus number for NFP is 185k, so anything over 225k or under 150k headline numbers might move markets, [assuming that these sclerotic markets are in fact still capable of moving….]<br /><br />See you all tomorrow.Leftbackhttps://www.blogger.com/profile/07728096415928915882noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-20546891915213960922016-08-04T20:40:18.567+01:002016-08-04T20:40:18.567+01:00@Anon 4:39
Re. Initial BoE perspective in 2009:
h...@Anon 4:39<br /><br />Re. Initial BoE perspective in 2009:<br />http://www.publications.parliament.uk/pa/cm200809/cmselect/cmtreasy/uc376/uc37602.htm<br />Search for "75 billion"northshorenoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-60568045139817610952016-08-04T20:36:40.490+01:002016-08-04T20:36:40.490+01:00US stocks dont go down, EU stocks dont go up. Oil ...US stocks dont go down, EU stocks dont go up. Oil goes down, XLE doesnt. Steel up, autos down... im sure the list goes on and on.. Hope you pick the right spots. When you do you are a genius and your logic is self explanatory (ie 12yr HFM for US Equities and Nico for EZ equities), when you pick the wrong asset, lots of hair pulling<br /><br />I'm trimming positions here. Wanting to go short but not ready. abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-78405147626483661622016-08-04T19:21:02.976+01:002016-08-04T19:21:02.976+01:00Those crazy Swiss. Zhedge has them upping their US...Those crazy Swiss. Zhedge has them upping their US equity portfolio by 20bln or 50% this year. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-19019107192473976402016-08-04T19:07:02.695+01:002016-08-04T19:07:02.695+01:00Anon 5:29, thank you for your comments on NZD. I&#...Anon 5:29, thank you for your comments on NZD. I'm seeing it as a short, against AUD and CAD. I wasn't thinking next week's meeting would be a replay of this week's RBA meeting because I expect the RBNZ to guide for further rate cuts (unlike RBA which now seems on hold for a while). New macro-prudential regulations effective Sep 1 should cool the property market, opening the way for the cuts. Admittedly, this isn't my favorite FX view ... NZD real rates are still high and there are attractive yielding assets in the country, so it's tricky to short this in a NIRP world. I'm still running some -EURZAR, so that kind of neutralizes the "carry factor" I'm short through -NZDCAD. Less of an issue for +AUDNZD.johnonoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-81654027339118890582016-08-04T18:07:11.938+01:002016-08-04T18:07:11.938+01:00@Anon 4:57
I get the currency and trade imbalance...@Anon 4:57<br /><br />I get the currency and trade imbalances angle, although he denied it (he lied). I think nirp/zirp are fine, required even, if that's market driven to clear & allocate resources (with consequent implications for balance sheets, lending, asset prices). But the concurrent monetary choices obviously have other domestic and intra-national consequences. When the gilt curve resembles japan's perhaps they'll have another think about it.northshorenoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-33941710421527394642016-08-04T17:34:13.287+01:002016-08-04T17:34:13.287+01:00Any comments on the RBA rate cut with the banks ra...Any comments on the RBA rate cut with the banks raising deposit rates to counter it. Need cash?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-44326306357913181292016-08-04T17:29:27.460+01:002016-08-04T17:29:27.460+01:00@johno
I don't know wich way you think nzd is ...@johno<br />I don't know wich way you think nzd is interesting, to me it still has a good upside potential to 074/0.75 against dollar and it is a buy if it pullbacks towards 0.71 with nfp tomorrow <br />rbnz possible cut should have the same effect as rba one...<br />on the short side aud/nzd seems the best choice to meAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-40951366818579088982016-08-04T16:57:37.972+01:002016-08-04T16:57:37.972+01:00@northshore
weaker currencies are what they'r...@northshore<br /><br />weaker currencies are what they're pegging. if they didn't "stimulate" the economy, in a world of weaker growth and revolving currency depreciation, the currency would appreciate. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-87401604388802098592016-08-04T16:50:14.738+01:002016-08-04T16:50:14.738+01:00the 10bn corp ticket isnt a transfer anymore than ...the 10bn corp ticket isnt a transfer anymore than gov qe already is - it's just a test to see how they get on buying non-gov paper, ahem. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-44533210500454679062016-08-04T16:46:31.780+01:002016-08-04T16:46:31.780+01:00@Leftback: Carney today -
"...When you step ...@Leftback: Carney today -<br /><br />"...When you step back and look at the global economy as a whole and what's happening to interest rates in global economy as whole, there are a variety of forces. Some of it's the legacy still of the financial crisis, some of it is broader demographic forces, some of it's the rise of china and other economies; variety of factors which are all pushing down on global interest rates. Globally. And we're faced with the choice that as that equilibrium interest rate goes down, and in fact in many jurisdictions goes negative, we're faced with the choice of either ignoring it, and then running monetary policy too tight and unnecessarily contracting the economy. Unnecessarily. Missing our mandate. Or adjusting with as smart stimulus as possible that is as effective as possible, goes through multiple channels, which doesn't just go through the channel that directly affects the saver, but goes through multiple channels, which doesn't lead to negative interest rates in a way that can support growth. And that's the judgement that we have made today.”<br /><br />“...The reason we have low interest rates is not because central banks are choosing to have low interest rates. There are much bigger forces which are driving this. And so the question is whether we’re blind to that, and therefore we don’t provide the right amount of stimulus for the underlying economy, or that we take it into account.”<br /><br />I happen to agree that broader market borrowing/lending appetite is leading CBs, not vice versa. But one then has to question what (aside from wtf they're then doing with contradictory QE, corp purchases and hyper funding for lending) they're actually targeting beyond real/financial asset price inflation?northshorenoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-43150985395938813182016-08-04T16:39:53.795+01:002016-08-04T16:39:53.795+01:00They did what they had to to avoid being criticise...They did what they had to to avoid being criticised for not doing enough - weaker gbp, higher stocks, room for another cut, they're sitting pretty right now. Sterling vol to year-end has to be a sale.<br /><br />Can anyone point me to where any of these cb's discuss how they come up with the size of these packages? Yes we know they canvass dealers for liquidity input and Treasury for the calender, but what is the logic, size-wise? Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-33283560950345350082016-08-04T16:09:23.515+01:002016-08-04T16:09:23.515+01:00He did it. Woke up not wanting to trade this crowd...He did it. Woke up not wanting to trade this crowded thing, but Carney made it irresistible. Big package, and "majority" of MPC looking for another cut. QE can be increased too. +EURGBP.<br /><br />Love the post 12yo HFM.<br /><br />Any thoughts out there on NZD? Looks interesting on some crosses. +PLNHUF still looks the best thing out there.johnonoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-45433878173146543112016-08-04T15:52:28.800+01:002016-08-04T15:52:28.800+01:00Lb,
You're falling behind the times. Mayfair i...Lb,<br />You're falling behind the times. Mayfair isn't really what it once was. Full of 27 year olds spoiling my steak by chuntering about 'mega trades' in voices that ensure that most people in Doncaster will not have failed to have heard their commentary. Strangely , I rarely hear any conversation about the one's that didn't work out. I just wish I also knew how to call every shot right then I too could be a 'mega trader'.checkmatehttps://www.blogger.com/profile/03688082792316894545noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-91476824221263062962016-08-04T15:02:59.280+01:002016-08-04T15:02:59.280+01:00What could be more of a wealth transfer to billion...What could be more of a wealth transfer to billionaires than BoE buying corporate bonds? Another round goes to the architects of the right-wing coup in Britain. <br /><br />Now exactly how do Brexit and BoE QE help our hapless "LEAVE" voter in Wigan? You've been bloody well shown! Lord Snooty and his pals Nigel & co. just pulled another fast one on you and now they're having lunch at their club in Mayfair.Leftbackhttps://www.blogger.com/profile/07728096415928915882noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-34941716932688439392016-08-04T14:59:57.403+01:002016-08-04T14:59:57.403+01:00That was my thought too for a limiting factor, but...That was my thought too for a limiting factor, but I don't think it matters at all - irony illustrating how far CB mission-creep has gone. Then again, Japanese banks were all over the press complaining about qe policy just before the "pause."Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-50996181954190663562016-08-04T13:25:59.044+01:002016-08-04T13:25:59.044+01:00They will stop this shit only when banks will be o...They will stop this shit only when banks will be on the abyss..are you ready for another banks crash?TheBondStrategisthttps://www.blogger.com/profile/15654760354283741885noreply@blogger.com