Fixed Income and Currency Strategist

Gautam Jain, PhD, CFA

FX & Rates

<ul>
<li>In line with my view that the dollar remains strong in the near term, one of the trading strategies that I have suggested is relative-value trades within EM currencies.</li>
<li>The volatility of EM currencies continues to rise, which in theory is supportive of relative-value trades as such environments are usually accompanied by wide dispersion among EM currencies. </li>
<li>However, I find that cross-correlations among EM currencies have risen, leading to a narrowing of dispersion between them, which means the environment is no longer supportive of relative-value trades.</li>
</ul>


In line with my view that the dollar remains strong in the near term, one of the trading strategies that I have suggested is relative-value trades within EM currencies.
The volatility of EM currencies continues to rise, which in theory is supportive of relative-value trades as such environments are usually accompanied by wide dispersion among EM currencies. 
However, I find that cross-correlations among EM currencies have risen, leading to a narrowing of dispersion between them, which means the environment is no longer supportive of relative-value trades.


Is the Environment Supportive of EM FX Relative-Value Trades?

House of Market Insights, Market Radar

Market Radar

House of Market Insights

Quick market updates and lot of ideas for your investments from a multi-asset portfolio manager working for a family office.

Quick Market Updates

Technical Analysis

Nasdaq-100 Stock Index / Technical Analysis

<ul><li>Nasdaq index is one of the biggest losers of the year: it is down almost 20% YTD. Now the tech index lies on a very interesting support</li><li>In case the index will go below the support 12,000 could be the next interesting level. In any case I see the current price more as a buy area</li><li>After one year of trading in a rectangle, finally Amazon made a breakout, but to the downside (after disappointing earnings and guidance). Not a great signal, and the stock will probably suffer for a while</li></ul>

Nasdaq index is one of the biggest losers of the year: it is down almost 20% YTD. Now the tech index lies on a very interesting supportIn case the index will go below the support 12,000 could be the next interesting level. In any case I see the current price more as a buy areaAfter one year of trading in a rectangle, finally Amazon made a breakout, but to the downside (after disappointing earnings and guidance). Not a great signal, and the stock will probably suffer for a while

<ul>
<li>In line with my view of the dollar remains strong in the near term, one of the trading strategies that I have suggested hedging an EMFX portfolio with the euro.</li>
<li>I show that the hedge has performed well by breaking down and comparing the return of the hedged portfolio with the unhedged version.</li>
<li>For me to recommend taking off the euro hedge, we would need to see the volatility of US rates and the probability of recession falling. </li>
</ul>


In line with my view of the dollar remains strong in the near term, one of the trading strategies that I have suggested hedging an EMFX portfolio with the euro.
I show that the hedge has performed well by breaking down and comparing the return of the hedged portfolio with the unhedged version.
For me to recommend taking off the euro hedge, we would need to see the volatility of US rates and the probability of recession falling. 


How Well Is Hedging EM Currencies with the Euro Working?

Cross-Asset Liquidity Strategist, CrossBorder Capital

Michael J. Howell

Cross-Asset Liquidity Strategist

Implementing Research Using Alt Data & AI

CrossBorder Capital

CrossBorder Capital is a London-based independent investment advisory firm. Founded in 1996, it exploits a gap in the investment arena by focusing on Central bank liquidity. 

It specialises in the monitoring and analysis of global liquidity flows - an important determinant of asset prices, from currencies through to bonds, equities and real estate.

CrossBorder Capital implements its investment strategy and currently manages over US$ 350m.


Cross Asset Strategy

<ul>
<li>
Global Liquidity seeing significant collapse and World Central Bank Liquidity slated to contract by 10-20% over 2 years</li>
<li>
 US Dollar set to make further gains.  US dollar swap-lines become important</li>
<li>
 World commodity prices to skid lower as World economy hits recession</li>
</ul>



Global Liquidity seeing significant collapse and World Central Bank Liquidity slated to contract by 10-20% over 2 years

 US Dollar set to make further gains.  US dollar swap-lines become important

 World commodity prices to skid lower as World economy hits recession


Alert: Do Bears Hunt in Packs? (Part 3) The Coming Turmoil in Currency and Commodity Markets

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. 

<ul>
<li>USD met rally targets across the board versus majors and in Asia. DXY is at a key crossroad with 104 and 102 pivotal break points that will define direction.</li>
<li>Sequence favors a dip (DXY 102 pivot) and re test of the 103+ zone with 104 the bigger break level. Weak below 102 (short signal).</li>
<li>DXY weekly cycle kissing major triple high zone and a key crossroad.</li>
</ul>


USD met rally targets across the board versus majors and in Asia. DXY is at a key crossroad with 104 and 102 pivotal break points that will define direction.
Sequence favors a dip (DXY 102 pivot) and re test of the 103+ zone with 104 the bigger break level. Weak below 102 (short signal).
DXY weekly cycle kissing major triple high zone and a key crossroad.


United States

The U.S. Dollar Index(USDX) indicates the general int'l value of the USD. The USDX does this by averaging the exchange rates between the USD and major world currencies. The ICE US computes this by using the rates supplied by some 500 banks. FOR REAL TIME SEE EIS ICEA<GO>.

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Dollar Index (DXY CURNCY)

Is the Environment Supportive of EM FX Relative-Value Trades?

The rise in the volatility of EM currencies should in theory be supportive of relative-value trades, but of late, the dispersion between them is...

Gautam Jain, PhD, CFA

Charts to Watch #4

Nasdaq index is one of the biggest losers of the year: it is down almost 20% YTD. Now the tech index lies on a very interesting support

Market Radar

How Well Is Hedging EM Currencies with the Euro Working?

I go over the performance of one of the trading strategies that I have suggested in line with my view of the dollar remaining strong in the near...

Gautam Jain, PhD, CFA

Alert: Do Bears Hunt in Packs? (Part 3) The Coming Turmoil in Currency and Commodity Markets

Part 3 of an explanation of the effects of much tighter Global Liquidity. The US dollar is headed higher and sky-high World commodity prices are...

Michael J. Howell

DXY Above 104 Would Be a Game Changer

USD met rally targets across the board versus majors and in Asia. DXY is at a key crossroad with 104 and 102 pivotal break points that will define...

Thomas Schroeder

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