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27th April 2015
Has the USD Peaked?

In recent weeks, the USD uptrend has faltered.  EURUSD’s seemingly relentless push to parity has stalled, GBPUSD has pushed back above the psychological 1.50 level, and USDCAD appears to have failed in its rally towards 1.30.  As such, it is worth asking whether the yearlong USD bull market is over… 

 

There is no doubt that the trade of the last twelve months has been ‘long dollar’.  It almost doesn’t even matter what you might have positioned this trade against…you could have shorted G10 currencies, EM currencies or commodities – you would have been a winner.  Over the last year, the USD has even strengthened about 10% against the mighty Swiss Franc.

 

Calling a change in a major market trend is a very dangerous move.  Very few traders are clever / lucky enough to trade the ‘top tick’ and call the change in trend (just) in advance of a key turning point.    It...



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20th April 2015
Grexit: Challenges and Issues

Following the launch of the ECB’s QE programme in March, we have seen the euro weakening against its major peers. Since then, as economic sentiment has started to improve, the euro has resisted the downward pressure and remained above parity against the dollar. With the uncertainty around QE out of the way, the key source of potential instability in the Eurozone is Greece. Market focus is zoomed in on negotiations between the Greek government and its creditors, with an increased probability of default in May when the country is scheduled to repay almost EUR 1bn to the IMF. The Eurogroup meeting this Friday in the Latvian capital Riga is unlikely to bring a breakthrough. In this report we examine implications of the potential Greek default and argue that default doesn’t necessarily imply Grexit.

 

 

Why Greece is unlikely to go through with Grexit?

 

Pragmatically, even with the left-wing Syriza in charge, it is...



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7th April 2015
Dollar holds firm despite weaker than expected payrolls

The Easter mood was dampened by the worse than expected US jobs data. Although the headline unemployment figure remained in line with expectations of 5.5%, non-farm payrolls fell significantly short of expectations coming in at 126k (previous 295k, expected 248k). The dollar weakened thereafter, with EURUSD breaching the psychological level of 1.10. The news divided investors, with some still supporting the bullish dollar case and viewing the decrease as a temporary weather and West Coast port strike related phenomenon, while others are becoming increasingly cautious and see the data as a sign of a wider fundamental weakness in the economy. This week, we look more closely at the implications of the jobs data and why the division between the bulls and the bears might not be so clear cut.

 

US Job Report Highlights

 

 “Unemployment rate held at 5.5 percent, and the number of unemployed persons was little changed at 8.6 million.”

 

Source: http://www.bls.gov/news.release/pdf/empsit.pdf...



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