Short AUD/USD (from 16-Nov to 1-Dec)
Real-Time AmpGFX — closed NZD and AUD shorts (Fri 12/1/2017 9:23 AM MT)
Bought AUD and NZD at 0.7635 and 0.6911 respectively.
Comment
I have decided to close these trades on news reports that Flynn is prepared to testify against Trump, saying he was ordered to make contact with Russians.
The tax bill appears to be on track to pass the Senate today; this may provide support for the USD. However, the USD has appeared to bear the brunt of political uncertainty in the US this year, so I feel best to step aside for the time being.
Some might argue that this does not matter, even if Trump steps down or is impeached, this could be perceived as a positive end result.
However, if Trump attempts to fight back in the court of public opinion, this is likely to drag out beyond the mid-terms and dominate public attention. This could turn out to be quite negative for the USD.
At this point, it appears quite difficult to be long USD, even though economic trends and tax cuts may turn out very positive.
Positions
Long a half unit of an XBT derivative at $10,600
Real-Time AmpGFX – sold AUD and NZD, adding to shorts (Thu 11/30/2017 11:28 AM MT)
I have sold half units of both AUD and NZD at 0.7560 and 0.6838 respectively, adding to exisiting shorts.
A note on my bitcoin position, I mis-spoke earlier when I said my position was 1/10th of my standard FX position size. It is, in fact, 1/20th. I noted that given the volatility in bitcoin that I would call this a 1 unit trade. I have amended that to a half unit trade in my positions below.
Comment
The progress of the tax bill through the US Senate appears to be on track with Senator McCain saying he will support the bill.
US 10 year yields have lifted 4bp and 2yr swap rates are up 3bp to a new high.
The AUD/USD yield spread is -7bp on 2yr swaps and 8.5bp on 10-year bonds, both new long-term lows.
Positions
Short half unit NZD/USD at 0.6901; s/l 0.7018; t/p 0/6685
Short half unit NZD/USD at 0.6838; s/l 0.7018; t/p 0/6685
Short half unit AUD/USD at 0.7585; s/l 7663; t/p 0.7488
Short half unit AUD/USD at 0.7560; s/l 7663; t/p 0.7488
Long a half unit of an XBT derivative at $10,600
AUD/USD Real Time AmpGFX – lowered AUD t/p order (Fri 11/17/2017 8:48 AM)
AUD/USD has traded within a point of our 0.7535 t/p order. Now at .7544.
I have decided to remove the t/p, and leave it to see if we can find lower lows.
I am still struggling to find a strong view. EM Asia remains strong, US yields are still struggling to go up. The USD is down against EUR, GBP and JPY. So moves down in AUD and NZD look against the grain of a struggling USD.
However, US data has been strong this week, tax bill is progressing, China corp bond yields and NCD rates are rising.
The broader picture of RBA and RBNZ on hold and lacking the IT sectors that are attracting demand. Housing markets that are softer. And the currencies have made new lows, I am thinking I’ll stay with the shorts.
I was stopped out of GBP short in Asia
Short half unit NZD/USD at 0.6901; s/l 0.7018; t/p 0/6685
Short half unit AUD/USD at 0.7585; s/l 7663; t/p 0.7488
Real-Time AmpGFX – Sold AUD/USD (Thu 11/16/2017 4:18 PM MT)
Sold half unit of AUD/USD at 0.7585
Comment
The AU 2yr swap rate spread is very close to flat with the US. AUD is unlikely to benefit from equity capital inflow. Equity flows appear to be more the dominant force in FX direction this year. China risks appear to be increasing.
My s/l is further away that my t/p. So in this regard, it does not look like a good risk reward trade. This is why the position size is small. It reflects a lack of conviction in downside potential. However, I may also look to revisit the trade and lower the t/p or keep selling the bounces from these tech levels.
US yields have lifted today, this supports the trade, but it is hard to say if this will last with the Senate struggling to pass its version of the tax bill.
Positions
Short half unit NZD/USD at 0.6901; s/l 0.7018; t/p 0/6685
Short half unit GBP/USD at 1.3114; s/l 13223; t/p 1.2805
Short half unit AUD/USD at 0.7585; s/l 7663; t/p 0.7535