Talking about the trend in EURUSD and an example of efficient markets in action…
Talking about the trend in EURUSD and an example of efficient markets in action…
With Jackson Hole looming and China interfering in USDCNH, FX momentum has slowed for the moment.
• Macro > positioning
• UK electricity
• EM trade balances
• Near Earth objects are low odds but high EV if they hit
Looking at the forest, instead of the trees. Trade balance is an important broad representation of what’s going on.
Talking about how the USD used to selloff into Fed events and now rallies into them.
Looking into what factors drive EURUSD, both up and down. Turns out Euro equities, risk proxies, and relative rates are all at play.
Today, a slightly longer piece (4 pages, 7-minute read) looking at how Liz Truss may or may not impact GBP as the new PM of the UK.
As housing-centric economies like Canada and New Zealand enter mildly restrictive interest rate territory, the currencies look vulnerable. Owning vol there looks sensible, especially given vol and equity seasonals. 3-month 1.33 USDCAD digital, for example.
The title is self-explanatory. Best expressions of the view are 2-month or 3-month USDCNH and USDCAD topside, imo.
Today:
• QT is about to accelerate
• EURUSD keeps following the same playbook all the way down
• Take profit on EURAUD
• Fed needs to stop overcommunicating
Some comments on the EUR and 60% of a bearish USDKRW thesis for you to expand upon and think about if it fits your priors.
Catch up with Brent Donnelly and Macro Alf every week on The Macro Trading Floor. Listen as they discuss themes that are moving markets, highlight important trade ideas, and get to the bottom of what’s going on in macro.
John Mauldin, Chairman
Mauldin Economics
One year of good ideas, dumb mistakes, and timeless trading lessons over a wide range of topics like tactics, strategy, mindset, risk management, and of course the psychology of successful trading. Watch real trade ideas come to life in real time.
We teach you how to think, reason, and behave like someone who makes money.
