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US trading thematics: Part 1 “When Powell talks”

Over the coming 48 hours and then over the coming 2 weeks, Fed speak and US data is going to be some of the best trading opportunities in 2024. It’s been a pretty low-vol year despite several events that would under normal circumstances be triggers for much larger fluxes in FX and bonds. But to date: that has not been the case. Let's look at t...

November 1, 2024
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Earning Season: Prep starts now

We are less than three weeks away from the ASX earning season and we are less than two weeks away from the earnings season in the US. So, we need to start prepping for trades and opportunities now.  First and foremost, do not forget that confession season is well and truly upon us here in Australia. Downgrades clearly have been coming from the ...

November 1, 2024
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An oldie but a goodie – Why central bank differentials still work

2024 continues to be an interesting year for FX. Even more now that the starters gun has been fired with the European Central Bank (ECB) and Bank of Canada as well as the likes of the Riksbank and SNB all starting to their respective cash rates from COVID peaks. This brings us to the next stage – who is next, who is going the other way and whe...

November 1, 2024
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Trading the inflation bumps Part 2: Narrow to non-existent

First – let us just say that as we suspected the AUD jolted all over the place on the release of the May CPI – the read was much stronger than consensus and the fallout from the read ongoing. But, and it’s a but, we predicted the AUD’s initial bullish reaction was counted by once again point to the fact parts of the monthly read can be expl...

November 1, 2024
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Trading the Inflation bumps – The May surprises and what to do with it

The consensus for the monthly Consumer Price Index (CPI) is for a rise to 3.8% annually in May, the range being 3.6% to 4.0%. This would be the fourth consecutive rise in yearly inflation and would show that not only is inflation ‘sticky’ it could be considered ‘entrenched’ Monthly CPI indicator YoY% This headline will cause large...

November 1, 2024
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A frightened Hawk – The RBA needs to come clean

We know that this is slightly contrary to the consensus views but we think it needs to be said. The communication from the RBA (Reserve Bank of Australia) is unusually unclear, confusing and conflicted.  The view conveyed in statement, press conference and minutes currently we would argue counter each other. And the reason for this we believe i...

November 1, 2024
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When less is more – Why one cut in 2024 was good news?

We have been scratching our heads as to what exactly drove some of the strong price action in pairs, equities and bonds off the back of a further hawkish turn from the Fed at its June meeting. So, what exactly has promoted the moves on markets and what else should we as traders acknowledge from the Fed meeting First Powell has pointed to a po...

November 1, 2024
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The Tricky trade of Oil

Never has the oil been trickier than it is right now. The influences on the price are complex, varied and time dependent. It’s even trickier  when you look at it from the trade of commodities versus equities.  Here are the key things that are catching our attention with oil trading in spot, forwards and equities.   Spot vs. Antici...

November 1, 2024
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The race has begun – who is left holding the rates bag

FX and indices traders are now on notice – the race to restart economies is upon us. We have to-date seen Riksbank and SNB move policy but with the Bank of Canada (BoC) now entering the rate cut movement – the race is now well and truly on and the interest rate differentials that come into play with currencies will ramp up. Potential for Fur...

November 1, 2024
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Reading between the lines for the USD

Last week I highlighted Governor Chris Waller’s speech – however the more I look into his talk the more it needs greater emphasis as it contained both hawkish and dovish elements.  The Hawk Waller indicated that he would need at least three more months of "good" inflation data before considering a rate cut. He was suggesting this might h...

November 1, 2024
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Plateauing is just another way of saying ‘stuck’

Let’s make things very clear – Australia’s inflation rate is plateauing in fact I would argue it’s starting to reaccelerate in areas Australia can least afford. From a trading and momentum perspective this needs explaining.  Stronger Than Expected Print April's CPI data exceeded expectations and was at the very top of the surveyed ra...

November 1, 2024
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Moving forward – the volt revolution of transport 

The transportation of the world is becoming one of the most interesting trading places in markets as we clearly have a structural long-term change coming as the world moves from the black stuff (oil) to electricity.  But the trader question is – what’s happening in these markets now? The black stuff - Oil Oil prices have softened due ...

November 1, 2024
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Where’s the Federal Reserve at?

Slowing Growth and Potential Rate Cuts: Recent economic data suggests a slowdown in growth, contrary to earlier expectations of reaccelerating growth and inflation. Federal Reserve Chairman Jerome Powell's statements and recent economic indicators point towards the possibility of lower policy rates in the near future. Key indicators, such as the so...

November 1, 2024
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Economic versus the Federal Reserve Policy Implications

Where’s the Federal Reserve at? Slowing Growth and Potential Rate Cuts: Recent economic data suggests a slowdown in growth, contrary to earlier expectations of reaccelerating growth and inflation. Federal Reserve Chairman Jerome Powell's statements and recent economic indicators point towards the possibility of lower policy rates in the near f...

November 1, 2024
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What a difference a (CPI) Day makes

We often talk about, ‘one piece of data does not make a trend,’ that ‘a headline is just a headline’ and that ‘assumptions are not facts.’ We feel this timeless market lesson has been slightly forgotten of late and the latest US CPI data may be case-in-point judging by the market’s reaction to the read. Let have a dive into the ...

November 1, 2024
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