The market looks ready to hop on the short USD train.
I was reading an essay by Hayek on the weekend (Friedrich, not Salma) and one takeaway was that they used to put a double dot above the second o in cooperation. And it’s not called an umlaut!
I like that.
Long EURUSD 1.0545
Stop 1.0434
Long AUDUSD 0.6239
Stop 0.6054
Long 10MAR 104.30 CADJPY put ~64bps
Covered ½ the notional at 104.30 and sold it out at 104.72.
Short gold at 2940
Stop loss was 3011 now 2936
Take profit was 2805 now 2843
This reaction in USDCAD is one of the most mind-blowing things I have ever seen in thirty years of FX trading. I suppose you can argue the dollar is so overvalued that even 25% tariffs on Canada cannot push USDCAD higher. If USDCAD doesn’t go up on this, there is no reason to think EURUSD will go down on tariffs, either. Or AUDUSD. I am going long AUDUSD with a stop at 0.6054. And long EURUSD with a stop at 1.0434.
That’s it. Simple, short and sweet today.
Still flat
Hi. Welcome to this week’s report. Positioning remains clean as the market gets tariffs and wants desperately to flip short dollars when the time is finally right. There is an enormous pent up USD down trade sitting out there intellectually but nobody wanted to pull the trigger yet. Changes in EU deficit and spending attitudes brought on by US isolationism, and a serious stagflationary vibe from US economic data means interest rate differentials are moving hard against the dollar. But the looming threat of tariffs is hampering USD downside. Til now.
I was reading an essay by Hayek on the weekend (Friedrich, not Salma) and one takeaway was that they used to put a double dot above the second o in cooperation. But it’s not called an umlaut. Umlaut and diaeresis are both diacritical marks that use two dots above a vowel. However, they have different purposes and uses.
Umlaut: A German diacritic that changes the pronunciation of vowels.
Used for the letters ä, ü, and ö. Often changes the meaning of a word. Appears in a combination of two vowels, it goes over the first vowel.
Diaeresis: Used to differentiate two vowels in the same word. Indicates that the vowel is pronounced in a separate syllable. Appears in the words “naïve” and “Brontë”. Used in French words such as Noël (Christmas) to remind you not to fuse the two vowels into one sound. Used in Spanish to indicate the need to pronounce a vowel such as u in vergüenza (“shame”) or ambigüedad (“ambiguity”)
F. A. Hayek
Salma Valgarma Hayek Pinault née Hayek Jiménez
Hawkish RBNZ hasn’t unlocked much upside for NZJDPY yet. US bonds trade well.
Hawkish RBNZ plus solid JGB auction plus stock market OK = NZDJPY higher
