Eco Data 10/14/15 – Action Forex

Most notable from yesterdays economic roundup is soft inflation on both sides of the Atlantic as measured thru the PPI as well as dissappointing retail sales from the US. This aided the EUR having a good run toward 1.15 as well as supporting other majors as timing for rate hikes becomes more certain of being pushed back.

Source: Eco Data 10/14/15 - Action Forex

China Data

China Trade balance was a bit of a mixed bag but the key news was 20% down on imports which doesnt bode well for the Antipodeans. The recent devaluation didnt help of course but the result just underscores the slowing economy and its transitioning to more services orientated - great for internal economy !

Would expect to see a fall in aussie and kiwi soon. Oil showing some volatility of late as well so think about good levels to short at.

IMM positioning

Not much happened last week. Fairly benign changes. which is suggestive of a wait and see approach which falls in line with the market been unclear as to when Fed will liftoff. Net short Euro increased slightly. Commodity currencies were also fairly stable. With Oil having a bit of a run along with Aud, CAD and Nzd I would suggest that the underlying weakness of these currencies remains intact. Would not be surprise to see falls back toward the levels of the previous week once the October exhuberance subsides.

Remember to be careful out there - I'm calling a bear market rally given the speed on the turnaround and lets face it fundamentals have not changed that much. Be fearful when others are greedy - good advice to heed this Quarter.

Aussie Aussie Aussie

Oy oy oy.... if you followed my tweets you would be sitting up in the Hawks crib with a glass of wine. Sure there not all winners but after August its nice for a good win. Stop now at 7325 and looking for 7414.

AUD Strength

My long aud/usd from 7035 has benefited from a short term, at least, positive risk sentiment. Equity markets have had a nice couple of days from start of this month + RBA holding rates. Presently aussie around 7180 and hopefully can breach 72 and hold. Energy markets are supportive of the move as well so we are seeing some $weakness.

Other good news is VIX is below 20 after a couple of months since the equities rout in Aug/Sept. All in all positive for aussie and kiwi and CAD which has been on a great comeback from 1.34 now close to 1.30.

As always take everything with a grain of salt and all your own transactions are at your own risk.

IMM Positioning

Whats happening this week. USD net longs sees more reduction. JPY given risk aversion status saw net shorts reduced. A couple of banks have been talking up a AUS + NZD Vs CAD basket as a China relative play. That is AUD and Kiwi subjected more to China shocks then the CAD which is more oil based. EUR reduced net shorts as well - I guess a bit of a shke out after the fomc move to 1.15

Good GDP print last week and a suggestion of a hawkish hold from Yellens speach suggest we might see an increase in net USD longs this week. Also look ut for NFP out later in the week and some China data.