Short Euro 1.1350. No momentum, that may change. Big consolidation between there and 1.1395. Aussie broken again, not a good sign for risk. Just following the tape, somewhat reluctantly
Is it me, or are things just eerily quiet? Equities got hammered earlier, just a whimper from currencies.
Am thinking along these lines, this is dummy pullback on the equities market, then we get a dummy rally for coupladays, then a correction which may last couplaweeks. Working on the theory SPX will get to 2700, then correct back to 2500 region. Hence quiet atm, we are at transition from bullish to bearish in the short term and going into lull mode during the change. If the scenario works out, both longs and shorts will get battered which is true to form for how the mkt likes to operate.
'Doom loop' threatens to send Aussie dollar plummeting The beleaguered Australian dollar faces a growing threat: an addiction to real estate is creating a debt mountain. After being the worst-performing developed-nation currency in 2018, the Aussie is set to extend losses this year as rising indebtedness at households and the economy overall make it more likely the Reserve Bank of Australia will cut interest rates, according to both HSBC and Rabobank. HSBC sees a further 7 per cent slide to 66 US cents by year-end, while Rabobank tips 68 cents. "The RBA just sat there watching the housing bubble grow for the past couple of years," said Michael Every, head of Asia financial markets research at Rabobank in Hong Kong. "You're in a doom loop. Now that the Federal Reserve is finally on hold, the RBA can finally talk about cutting again -- and they will." Australia's household debt-to-income ratio has skyrocketed to 189 per cent from 67 per cent in the 1990s, according to data compiled by the RBA. The increase has gathered pace in recent years as a decline in interest rates encouraged households to take on more borrowing, while an easing of constraints on bank lending increased the funds available, RBA Assistant Governor Michele Bullock said in a speech in September. Australia's dollar has already tumbled for five straight quarters - including a decline of 9.7 per cent last year - as the US-China trade war and signs global growth is slowing has sapped demand for the export-reliant currency. After ending last year at 70.49 cents, the Aussie briefly slid to 67.41 cents on Jan. 3 in a so-called "flash crash" when a holiday in Japan led to disjointed Asian markets. That was the weakest since the depths of the global financial crisis in March 2009. The currency was at 71.42 cents at 8:45am AEDT on Thursday. HSBC is bearish on the Aussie due to the country's debt binge and also the widening yield discount on Australian bonds compared with US Treasuries, according to David Bloom, global head of foreign-exchange research in London. "What does concern us about Australia is that their interest rates structure is below that of the US, and we would argue that the US is a lower risk profile," he said, referring to the nation's debt levels. "You're getting paid less for the Antipodeans, and you get more risk." There's a 39 per cent chance the Aussie will touch 66 cents by year-end, according to data compiled by Bloomberg based on option prices. A year ago, the same projection for December 2019 had a probability of only 14 per cent. "When you have an economy that's piling on debt the way Australia does, the currency gets well supported because everything looks fine and dandy in this growth bubble," he said. "And then as soon as you reach the end of the rope, the only thing the RBA can do is cut -- and keep cutting." While HSBC and Rabobank are bearish, the broader market is more positive. The Aussie will strengthen to 74 cents by year-end, according to the median estimate of currency forecasters compiled by Bloomberg. Morgan Stanley says the Aussie will decline to 67 cents in the second quarter before recovering to end the year at 71 cents. "Markets are currently pricing in about a 50 per cent probability of an RBA rate cut over the next 12 months, fairly reflecting the economic weakness," Morgan Stanley strategists including Hans Redeker in London, wrote in a research note. "Under these dynamics, we see further Australian dollar downside." https://www.smh.com.au/business/mar...aussie-dollar-plummeting-20190124-p50taf.html
I'll trade anything that moves against Usd. Just closed a small long usdcad trade; Always looking to see what is leading at any given time, Aussie/Cad/Nzd or Euro/Gbp. Actually that story could probably substitute just about any country in the developed world and be accurate. Correct me if I'm wrong. Right now Usd just the prettiest Gorilla in the zoo.
All sorts of dislocations from a real estate bubble. For one it also pumps up the price of commercial real estate, creating a false demand. Makes it hard for businesses that pay rent to cover their costs, drives up the price of maintenance for those that own. Looks great when its working. Bought some fir and meant plywood the other week. Not fun.
Slow death for the Eeero. Not letting anyone in or out here easily. 1.1365. Im short from a little higher.