Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

We are finding some interesting synergy between a stronger USD/TRY bleeding into EM FX that would align with our bearish EEM relative triangle and physical resistance at the 53 trendline barrier.This is an undercurrent not apparent in the DXY or USD weakness in Asia (risk-on).USD/BRL macro bullish flat may need more time but is setting up for a macro USD breakout higher. USD/ZAR bull triangle also taking shape.EEM relative chart due to break lower vs SPX and must see varying degrees of USD strength that will stems from BRL and ZAR sensitivity.

We are finding some interesting synergy between a stronger USD/TRY bleeding into EM FX that would align with our bearish EEM relative triangle and physical resistance at the 53 trendline barrier.This is an undercurrent not apparent in the DXY or USD weakness in Asia (risk-on).USD/BRL macro bullish flat may need more time but is setting up for a macro USD breakout higher. USD/ZAR bull triangle also taking shape.EEM relative chart due to break lower vs SPX and must see varying degrees of USD strength that will stems from BRL and ZAR sensitivity.

Fixed Income and Currency Strategist

Gautam Jain, PhD, CFA

FX & Rates

Russia's monetary policy decision tomorrow is a close call with consensus expectations of a 50 bp hike. I expect a smaller 25 bp rate hike but with hawkish messaging. Although inflation increased sharply in September, it was driven primarily by food prices. In the face of rising economic uncertainty due to new restrictions with daily coronavirus cases reaching the highest level, CBR should be cautious in tightening monetary policy. Moreover, the previous rate hikes and the recent currency strengthening should have a disinflationary impact with a lag. If the CBR moves as I expect, it should be supportive of my 2s5s steepener recommendation.Separately, the attached file is a snapshot of the EM 10y rates market in which I seek to identify the leaders and laggards among countries by comparing the performance of each to its history as well as to other countries based on their respective betas to an EM rates index.

Russia's monetary policy decision tomorrow is a close call with consensus expectations of a 50 bp hike. I expect a smaller 25 bp rate hike but with hawkish messaging. Although inflation increased sharply in September, it was driven primarily by food prices. In the face of rising economic uncertainty due to new restrictions with daily coronavirus cases reaching the highest level, CBR should be cautious in tightening monetary policy. Moreover, the previous rate hikes and the recent currency strengthening should have a disinflationary impact with a lag. If the CBR moves as I expect, it should be supportive of my 2s5s steepener recommendation.Separately, the attached file is a snapshot of the EM 10y rates market in which I seek to identify the leaders and laggards among countries by comparing the performance of each to its history as well as to other countries based on their respective betas to an EM rates index.

Rates 10y Dashboard: Russia to Deliver a Small Rate Hike Supporting the Steepener Recommendation

As the US dollar has come off the peak, EM currencies have benefited, including Asian currencies. The Thai baht is among the currencies that have performed well lately as it has been supported by easing of curbs on falling coronavirus cases, signs of tourism picking up, raising of the debt ceiling to create space for further fiscal stimulus, and the central bank turning less dovish. While there is ample room for the baht to make up its lag with the rest of EM, the currency's recovery is likely to be gradual and marked by volatility.Separately, the attached file is a snapshot of the EM currency market in which we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to an EM currency index.

As the US dollar has come off the peak, EM currencies have benefited, including Asian currencies. The Thai baht is among the currencies that have performed well lately as it has been supported by easing of curbs on falling coronavirus cases, signs of tourism picking up, raising of the debt ceiling to create space for further fiscal stimulus, and the central bank turning less dovish. While there is ample room for the baht to make up its lag with the rest of EM, the currency's recovery is likely to be gradual and marked by volatility.Separately, the attached file is a snapshot of the EM currency market in which we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to an EM currency index.

FX Dashboard: Is the Thai Baht Finally Turning?

EM currencies have broadly lagged the rally in commodities this year, but there are signs that this may be changing for at least two of the oil currencies. The Russian ruble has been weighed down by the sanction risk and FX interventions to meet the fiscal rule. The Colombian peso, meanwhile, suffered on the back of the deteriorating fiscal balance and anti-government protests earlier this year. More recently, however, the correlation of both currencies with oil has picked up, leading to them outperforming the broad EM FX universe. If oil prices stay at a high level, it bodes well for both currencies.Separately, the attached file is a snapshot of the EM currency market in which we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to an EM currency index.

EM currencies have broadly lagged the rally in commodities this year, but there are signs that this may be changing for at least two of the oil currencies. The Russian ruble has been weighed down by the sanction risk and FX interventions to meet the fiscal rule. The Colombian peso, meanwhile, suffered on the back of the deteriorating fiscal balance and anti-government protests earlier this year. More recently, however, the correlation of both currencies with oil has picked up, leading to them outperforming the broad EM FX universe. If oil prices stay at a high level, it bodes well for both currencies.Separately, the attached file is a snapshot of the EM currency market in which we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to an EM currency index.

FX Dashboard: Russian Ruble and Colombian Peso Finally Benefiting from the Oil Rally

Following the hawkish surprise at the last meeting, the Chilean central bank is likely to raise the pace of tightening even further at the MPC meeting tomorrow. Inflation has been rising steadily as the recovery picked up strongly on the back of the strong fiscal and monetary stimulus. More worrisome for the central bank is that long-term inflation expectations have deteriorated. The currency depreciation meanwhile has picked up pace as political uncertainty has risen, adding to inflationary risks. The central bank is thus likely to raise rates very aggressively to anchor inflation expectations and the currency in our view and is possibly evaluating a currency intervention program. Our bullish recommendations on the currency have taken a hit lately.Separately, the attached file is a snapshot of the EM currency market in which we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to an EM currency index.

Following the hawkish surprise at the last meeting, the Chilean central bank is likely to raise the pace of tightening even further at the MPC meeting tomorrow. Inflation has been rising steadily as the recovery picked up strongly on the back of the strong fiscal and monetary stimulus. More worrisome for the central bank is that long-term inflation expectations have deteriorated. The currency depreciation meanwhile has picked up pace as political uncertainty has risen, adding to inflationary risks. The central bank is thus likely to raise rates very aggressively to anchor inflation expectations and the currency in our view and is possibly evaluating a currency intervention program. Our bullish recommendations on the currency have taken a hit lately.Separately, the attached file is a snapshot of the EM currency market in which we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to an EM currency index.

FX Dashboard: Chilean Central Bank Is Set to Deliver Another Hawkish Surprise

Russia

The Russian ruble is the official currency of The Russian Federation. 

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RUB (USDRUB CURNCY)

TRY Bleed into EEM

We are finding some interesting synergy between a stronger USD/TRY bleeding into EM FX that would align with our bearish EEM relative triangle and...

Thomas Schroeder

Rates 10y Dashboard: Russia to Deliver a Small Rate Hike Supporting the Steepener Recommendation

Despite high inflation, Russia should raise the policy rate by less than consensus due to new restrictions as Covid cases have risen sharply. This...

Gautam Jain, PhD, CFA

FX Dashboard: Is the Thai Baht Finally Turning?

The Thai baht has performed well lately on the easing of curbs and tourism picking up. While there is ample room to make up its previous lag, the...

Gautam Jain, PhD, CFA

FX Dashboard: Russian Ruble and Colombian Peso Finally Benefiting from the Oil Rally

After lagging the rally in oil since the start of the pandemic, the Russian ruble and the Colombian peso have started to correlate better with oil...

Gautam Jain, PhD, CFA

FX Dashboard: Chilean Central Bank Is Set to Deliver Another Hawkish Surprise

Following the substantial deterioration of long-term inflation expectations along with the sharp currency depreciation, we expect the central bank...

Gautam Jain, PhD, CFA

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