FTA Trading Training - New Look

A Whole New Look!

Time to make some changes and as a result of feedback I have redesigned the blog to show the keys to my own trading decisions and the real meat of the fundamentals as revealed each week in data and politics. There is an emphasis on event risk that we can use to protect ourselves and to support our opportunities.

So let me know what you think.

The Global Macro Keys

Key Takeaways

Let’s start with the events of the week that caused a stir:

Trump politics (again) but much more serious as Mueller closes in. This is a veritable time bomb and there are a growing number of watchers that think his time is running out. Politics is a funny game and it can all change. The real problem is the threat of risk-oo….otherwise known as fear and we know one thing for sure, the market does not like uncertainty.

We stay with Trump, this time criticizing the Fed chairman for increasing the value of the USD by his policy of interest rates. I did advise watching Jackson Hole and Powell did step back a little as his tone was cautious. Still backing gradual rises he added he did not see an overheating risk. The USD sold off on the remarks. The chart is below.

Crazy days in Australia as the PM is replaced…it has been a volatile week.

Trump again…this time on Friday offering to support the populist party in Italy by buying Italian bonds.

Manufacturing PMIs overall for the EZ and Germany were disappointing and missed the expected number.

UK and the EU continue to grapple with Brexit and the chance remains of a no deal situation. Time is running out and this week the GBP suffered last week against the USD as a result. This week saw an improvement but that had a lot to do with the Trump news. Its a very uncertain pairing.

US data continues to undermine the optimism: Durable goods fell to -1.7% and a nasty fall from the last reading.

CAD retail sales were weak not reflecting much inflation there.

The yield curve is still flattening, and that is a warning of a recession down the line. US10 yield is in a critical place just below a head and shoulders pattern. That if it continues, in turn, can also threaten the USD.

Key Charts

USDX:

US10yield

Nikkei: clues on sentiment, now important to watch support:

China: this affects every global economy. Any weakness will spread:

Bounced off support…keep an eye on this world manufacturing PMIs and growth dropping can cause havoc. Its ok for now

Gold: always on watch for weakness in the USD or risk off. This has now firmly broken the downtrend:

Key Event Risk:

Next week is the last week of the month. We have to watch constantly for political and geopolitical news. Do not lose sight of the risk of deepening trade disputes…the talks with China did not get far.

Top of the economic data list id USD GDP on Wednesday, PCE Thursday

Watch German CPI for EZ inflation clues Thursday and same for the EZ overall on Friday

Keep an eye on China state data on PMIs

CAP GDP on Thursday

The Watchlist

EURJPY: a short on EZ weakness, Turkey exposure, weaker PMIs and Italy. JPY favours risk-off

USDJPY: a short on yield pressure in the US bonds:

FTSE: equities are at the top of the list if politics causes problems and that includes Brexit of course but general risk off as well from any Trump problems. I prefer to trade this than the GBPUSD which is murky and I will leave it alone.

Dax: same view: a short,

If risk off starts to build then I will look again at AUDJPY and Gold.

I will be back during the week to update with the essential pieces of the puzzle to improve our probabilities. That is the goal and if we add that to excellent risk-reward opportunities, there you will find your edge!  Feedback welcomed 🙂

 

Judith Waker