ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
In the wake of poor inflation data, a rate cut from the Reserve Bank of Australia (RBA), and then a dovish Statement on Monetary policy, speculators decided that this was not the time to have such a large net long exposure to the Australian dollar (FXA). Source: Oanda’s CFTC’s Commitment of Traders Roll forward to … Read more
Last week, the Australian dollar (FXA) was slammed by poor inflation data. Market expectations for a rate cut strengthened significantly as well. This week, the Reserve Bank of Australia (RBA) took heed and cut its cash rate from 2.0% to 1.75%. In its statement on the monetary policy decision, the RBA explained that its decision … Read more
The disappointing inflation numbers for Australia did not just take down the Australian dollar (FXA). Financial markets also rushed to ramp up the odds of a rate cut in the next policy meeting for the Reserve Bank of Australia (RBA). Source: ASX RBA Rate Indicator Even if the RBA takes a pass on a rate … Read more
In the last edition of “Forex Critical” I claimed that the Australian is not likely to maintain its current blistering pace of gains. Just three days later, the stubbornly persistent rally of the Australian dollar (FXA) may already be grinding to a halt. The Australian Bureau of Statistics (ABS) released its inflation data for March, … Read more
(This is an excerpt from a LONG overdue article on commodities I originally published on Seeking Alpha on April 18, 2016. Click here to read the entire piece.) Last week was a great week for a pairs trade in iron ore. I love this trade => Oil, Iron Ore & Gold Correlation: A Mining Pair … Read more
“The Australian dollar has appreciated somewhat recently. In part, this reflects some increase in commodity prices, but monetary developments elsewhere in the world have also played a role. Under present circumstances, an appreciating exchange rate could complicate the adjustment under way in the economy.” – Statement by Glenn Stevens, Governor: Monetary Policy Decision, April 5, … Read more
(This is an excerpt from an article I originally published on Seeking Alpha on March 8, 2016. Click here to read the entire piece.) On March 1, 2016, Glencore (GLNCY) announced its preliminary 2015 earnings results. During a media conference call, CEO Ivan Glasenberg declared a bottom for commodities. In the subsequent investor/analyst conference call, … Read more
It finally happened. Rio Tinto (RIO), a major producer of commodities like iron ore, has started to back off its generous dividend payout policy. In its latest earnings statement, RIO announced its total dividend for 2015 will come to 215 U.S. cents per share, the same as it paid out in 2014. Over the past … Read more
In its February decision on interest rates, the Reserve Bank of Australia (RBA) issued a surprisingly upbeat and rosy assessment of economic conditions in Australia. Outside of mining, I daresay economic conditions look particularly promising: “In Australia, the available information suggests that the expansion in the non-mining parts of the economy strengthened during 2015 even … Read more
Australia’s Department of Industry, Innovation and Science recently released its latest Resources and Energy Quarterly. As usual, I was most interested in the projections for iron ore and the Australian dollar. The Department has been over-optimistic in the past about iron ore. This time around, the Department slashed forecasts in what sounds like another disappointing … Read more