Bought AUD/NZD, and quick thoughts from the lounge
Real Time AmpGFX – bought AUD/NZD (Wed 8/30/2017 8:09 PM MDT)
I bought one unit of AUD/NZD at 1.1005; s/l 1.0923
Between flights, strong capex data and sold China PMI, iron ore firmer
Real Time AmpGFX – quick thoughts from the lounge (Wednesday, 30 August 2017 6:37 AM MDT)
I have been delayed getting back home to Colorado. It’s a bit embarrassing, but a tip from hard experience, if you get a new passport because you are out of pages, don’t forget to take your old passport with your visa in it on your next overseas trip. Apparently US immigration are very particular about these things.
Anyway, that is probably not that relevant for trading, but I do prefer to be at my desk following events in the market rather than watching SkyNews, working on my laptop from a cheap London Hotel. UPS WorldWideExpressPlus let me down a bit, 5-days to get a parcel to London. Something about a bank holiday and a flood. Anyway hoping to be home with the family before nuclear war breaks out.
The upside is that Delta is partnered with Virgin Atlantic, and the VA lounge is very good at Heathrow where I am now on my second Bloody Mary; possibly why I am rambling more than usual. For some strange reason I always order Bloody Marys at airports and on planes. I think it is a half attempt to be healthy?!.
The FX market looks very messy, making for my reluctance to be involved at the moment. It is hard to sell USD at these levels, when the US data has been getting better recently and there is considerable uncertainty around US politics, and big issues to navigate through Sep/Oct.
The Fed is expected to set sail on QT after its next meeting, which prob means starting in October. But even that may depend a bit on if spending bills are passed and the debt ceiling limit adjusted. Now Congress will also be asked to fund emergency spending for Texas. And some kind of response to NK should also be expected. Meanwhile Trump has got so much on his angry mind (Walls, Korea, NAFTA, China, Texas, Tax, Twitter, Trade, Congress, Fake media) it not clear he will be able to cope and what mess he will make worse.
I was coming into this week wondering if I might buy AUD, possibly against the NZD again, anticipating a potential bigger than expected Australian capex spending report and forecasts on Thursday. This report has been subdued and out of line with strong business confidence, a recovery in non-residential building approvals, solid employment growth, rising government infrastructure spending, stronger commodity markets and stronger business investment abroad. The weak outlook in this report has contributed to the RBA’s subdued expectations for business confidence. I see a risk that it provides a positive surprise.
However, I decided not to (yet) since iron ore prices have fallen significantly in recent days, and the July Chinese economic data was weaker than expected. Uncertainty around China remains an issue for the AUD. And I have little feel for what the China PMI data will say about the economy released tonight and Thursday. Chinese NCD rates have been edging up again recently, and they are leaning into the shadow banking mess a bit this year. I am a bit worried that China is not as stable as it seems.
I will be in the air shortly and struggling to stay in touch with these developments. So best to stay out for now.