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Due Synicz...
One follow up Question:
Data regarding exports of construction/industrial materials to China serve as a proxy into the pace of expansion in China. Import data should be clean also. These data are harder as it entails data from other parties.
In your experience, does assessing Import/Export Data serve as a proxy for pace of expansion in general for any nation? Is the method effective or are there any guide metrics one can use?
I dont rely on a particular origin haha. I read analyst reports, particularly those by banks, and rely on the data they supply in their report. But I do take their opinion and view with a grain of salt (You never know exactly what their egy is).
From my knowledge, Aussie economy has quite a massive dependence on exports to China, South Korea too. Data regarding exports of construction/industrial substances to China function as a proxy. Import data ought to be relatively clean too. These data are harder as it involves data.
Synicz,
A easier way for me would be to track their major trade partners or information that's not under their own control.
When you get time, could you please list the data which you watch/major exchange partners to check China?
Thanks
Yeah im watching China but taking their economic information with a grain of salt. From what I have been reading, China is thought to be gaming their economic information to serve their attention. A means for me is to monitor their major trade partners or information which is not under their control.
Are you keeping a watch on China? This may have an impact on your short as well.
China CPI came out awful so lets see whether it takes its toll on AUD. I left a few pips going long on Aud last month due to positive cpi from china.
RBA GOV was fairly dovish this morning. I moved gbp/aud and banked 37 pips in less than two hours.
It had been an arbitrary horizon. Ideally, I want to observe choice. Which could have impliion on US equities and thus, risk belief.
Trade negotiations are under consideration. I view it as being exposed to downside risk on account of the recent relief rally. Because of the nature of the speculation, I decided to not extend my commerce horizon too far.
Aussie wise, I'm fairly convinced that the lack of interest rate growth will hamper AUD strength. The economy is still not growing in any meaningful way. If it had been, chances are that the strength would be reflected in the currency cross. So I have a bearish perspective on the aud.
You mentioned 1-3 months. Are you saying 1-3 since the white house said that's when trade negotiations would be finalized?
I hope the below helps you:
In their March meeting, the RBA kept monetary policy unchanged with the Cash Rate remaining at 1.5 percent as anticipated.
In their corresponding announcement, the RBA reiterated that they judged holding policy rates is consistent with sustainable economic growth and attaining the inflation target.
Additionally, low rates continue to encourage the national market and that the prognosis is for faster growth this year than last year although a strengthening exchange rate could slow rate of economic activity and inflation.
Employment statistics for February was overall disappointing as Employment Change printed at 17.5K versus market consensus of 20.0K along with the Unemployment Rate increasing to 5.6 percent versus hopes of remaining unchanged at 5.5 percent.
It is well worth noting that Full-Time Employment increased by 64.9K, suggesting that the miss on Employment Change was mostly due to a fall in Part-Time Employment, dampening the remainder of the report to a degree.
Inflation statistics for Q4 was complete unsatisfactory with headline CPI printing at 0.6 percent Q/Q and 1.9 percent Y/Y versus market validity of 0.7 percent and 2.0% respectively.
Trimmed Mean CPI also missed hopes, printing at 0.4 percent Q/Q versus consensus of 0.5 percent and 1.8 percent Y/Y versus consensus of 1.9 percent.
GDP for Q4 printed slightly below expectations at 0.4 percent Q/Q and 2.4 percent Y/Y versus market validity of 0.6% and 2.5% respectively.
Despite the miss on expectations, it is worth noting that Q3's 0.6 percent Q/Q and 2.8 percent Y/Y was revised higher to 0.7 percent and 2.9% respectively.
A deeper look into the report shows the miss on expectations was mostly due to bad weather conditions weighing on exports.
The AUD is highly connected to risk opinion and the commodities complied, as such AUD will remain well supported during instances of risk on times or belief when commodities see strength, however, remain pressured during periods of risk-off opinion or drawback found in commodities.
From a fundamental perspective, we view that the AUD as being overall neutral with the RBA expected to remain on hold for the near future.
Fundamental: Neutral
We currently view the AUD as using an overall neutral bias as the RBA's rhetoric continues to suggest that monetary policy will remain unchanged for the near future.
Sentiment: neutral
We currently view AUD as having a neutral sentiment bias with developments in commodities being the key effect until we get another clear underlying driver.
Well CAD as a counter currency could be a chance. But it skews away from the risk sentiment play that was intended.quote I agree with your Aud analysis but short Aud/cad. The nafta agreement will drive the Aud way more down compared to jpy. Oil is performing and this can contribute to cad. The jpy is going to stay risk on sentiment periodically and just be useful in supplying. It does not have the legs to cause a long term down trend. So there'll be alot of aud selling and cad buying
I concur with your Aud analysis but short Aud/cad. The nafta agreement will induce the Aud way down compared to jpy. Oil is currently performing well and this will contribute to cad also.
The jpy will remain risk on sentiment periodically and just be beneficial in supplying pullbacks which it has done. It doesn't have the legs to create a long term.
So there'll be alot of aud selling and cad buying
10/04/2018
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Today's theme seem to be among risk-on.
Intuitively, it seems that concessions by China has helped to sooth trade war fears.
That said, I really do have my doubts that the optimism will continue. With all the volatility and sensitivity from the recent years, it wont take much to ignite another selloff.
My particular attention was diverted to AUDJPY. A currency to exchange risk sentiment. Specifically, a brief AUDJPY looks like a value bet that is possible. Im betting that with all the sensitivity to headline events, markets will probably probably be easily spooked and selloff heavily by surprises.
To ensure a margin of safety in my trade, I picked AUD as my assessment of this aussie market is quite feeble. And with China's economic slowdown, the AUD has begun to reflect that in its strength the past 3 months. On the Yen facet, JPY has been strengthening the past two months. Mainly due to domestic politics. But also partially because of this market volatility. My premise here is that the volatility will probably ensue, encouraging the Yen strength.
The time horizon for this trade is going to be on the medium term horizon. Preferbly 1 - 3 months. In a trade. If price moves against me, or I am by the end of 3 months, I will get out. I will keep riding the trend if price moves within my intended direction.
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