Fixed Income and Currency Strategist

Gautam Jain, PhD, CFA

FX & Rates

We revisit our near-term view for the US dollar and EM currencies in this note. The attached file is a snapshot of the EM currency market, which we produce daily, and where 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 the broad market. The analysis, therefore, is not a forecasting tool but to be used for identifying dislocations, which we loosely define as price moves that cannot be justified by fundamentals.

We revisit our near-term view for the US dollar and EM currencies in this note. The attached file is a snapshot of the EM currency market, which we produce daily, and where 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 the broad market. The analysis, therefore, is not a forecasting tool but to be used for identifying dislocations, which we loosely define as price moves that cannot be justified by fundamentals.

FX Dashboard: Dollar in the Driver's Seat

The attached file is a snapshot of the EM currency market, which we produce daily, and where 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 the broad market. The analysis, therefore, is not a forecasting tool but to be used for identifying dislocations, which we loosely define as price moves that cannot be justified by fundamentals.

The attached file is a snapshot of the EM currency market, which we produce daily, and where 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 the broad market. The analysis, therefore, is not a forecasting tool but to be used for identifying dislocations, which we loosely define as price moves that cannot be justified by fundamentals.

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

Our bet was that a USD low near DXY 89 would front run a risk off cycle for equities. Now that a low appears to be in place we are focusing on levels that would induce upside acceleration for the USD and bleed into the risk universe (AUD/JPY short). The pain trade is USD short covering in EM and Asia.Euro top near 1.23 and break below rising wedge support as pinpointed over a week ago.USD/ZAR and USD/TRY are favored long plays in EM. In Asia, we have touted buying USD vs KRW, THB and INR but also see a high conviction USD rally set up versus SGD and then IDR.Macro view is to sell the DXY near 92-94 for new lows but there will be a slew of trading swing points into the summer.

Our bet was that a USD low near DXY 89 would front run a risk off cycle for equities. Now that a low appears to be in place we are focusing on levels that would induce upside acceleration for the USD and bleed into the risk universe (AUD/JPY short). The pain trade is USD short covering in EM and Asia.Euro top near 1.23 and break below rising wedge support as pinpointed over a week ago.USD/ZAR and USD/TRY are favored long plays in EM. In Asia, we have touted buying USD vs KRW, THB and INR but also see a high conviction USD rally set up versus SGD and then IDR.Macro view is to sell the DXY near 92-94 for new lows but there will be a slew of trading swing points into the summer.

USD Acceleration Points that Will Bleed into Equity Risk

Managing Director

Elan Gore

TMI Data Science

TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade & traditional media.  Our proprietary software, TMI Machine, is a text-mining platform designed with the buy-side & capital markets professional in mind, text-mining the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income & individual equities.  TMI provides custom leading indicators and systematic trading strategies, operating at the nexus of linguistics & statistics drawing on vast experience in investment banking and hedge fund settings in senior quantitative and fundamental roles.  

TMI Data Science was founded by Elan Gore, an award-winning Senior Global Basic Materials Equity Analyst & China Economist with 15 years of experience in North American hedge funds & institutional managers; and Alessandro Porrino, Ph.D., an Algorithmic Trading Analyst and Programmer with 10 years of front-office experience ranging from complex FX option pricing to auto-hedging strategies at Bank of America Merrill Lynch and Standard Chartered.  Mr. Gore holds an MBA in Finance from New York University Stern School of Business, and Mr. Porrino holds a Ph.D. in Systems Engineering from Brunel University London.

Macroeconomics

<ul>
<li>Financial conditions are extraordinarily easy, but the topic of tighter financial conditions has been trending in our media analytics</li>
<li>Just as the market momentarily reconsidered a "Goldilocks" macro view with yields falling back to 1.11%, the Biden stimulus package was unveiled to mixed reviews, weighing down on sentiment with higher minimum wage plans and hints of tax hikes highlighting a more pronounced progressive agenda</li>
<li>Our data sees a resurgence in media preoccupation with the Wall Street vs. Main Street disconnect, emphasizing pressure for more equitable support to households; but data supports the notion of broadly rebounding consumer spending in H2 across multiple income segments</li>
<li>We believe Biden was not expected to incorporate the minimum wage proposal into a stimulus package at this time, based on our analytics</li>
<li>Underlying macro recovery is unlikely to be derailed by today's surprises, but recent concerns on future tightening of financial conditions are now joined by worries on the cost of fiscal stimulus vis-a-vis wealth redistribution under the new administration</li>
</ul><div class="content-highlight">TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. </div>


Financial conditions are extraordinarily easy, but the topic of tighter financial conditions has been trending in our media analytics
Just as the market momentarily reconsidered a "Goldilocks" macro view with yields falling back to 1.11%, the Biden stimulus package was unveiled to mixed reviews, weighing down on sentiment with higher minimum wage plans and hints of tax hikes highlighting a more pronounced progressive agenda
Our data sees a resurgence in media preoccupation with the Wall Street vs. Main Street disconnect, emphasizing pressure for more equitable support to households; but data supports the notion of broadly rebounding consumer spending in H2 across multiple income segments
We believe Biden was not expected to incorporate the minimum wage proposal into a stimulus package at this time, based on our analytics
Underlying macro recovery is unlikely to be derailed by today's surprises, but recent concerns on future tightening of financial conditions are now joined by worries on the cost of fiscal stimulus vis-a-vis wealth redistribution under the new administration
TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. 

TMI Snapshot:  Financial Conditions, Wall Vs. Main & Biden Stimulus Via Text-Mining

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)

FX Dashboard: Dollar in the Driver's Seat

Attached is our daily FX Dashboard that highlights dislocations in EM currency markets. In this note, we also revisit our near-term view for the US...

Gautam Jain, PhD, CFA

FX Dashboard - Feb 2, 2021

Attached is the daily FX Dashboard that highlights dislocations in EM currency markets with the objective of identifying the leaders and laggards.

Gautam Jain, PhD, CFA

FX Dashboard - Feb 1, 2021

Attached is the daily FX Dashboard that highlights dislocations in EM currency markets with the objective of identifying the leaders and laggards.

Gautam Jain, PhD, CFA

USD Acceleration Points that Will Bleed into Equity Risk

Our bet was that a USD low near DXY 89 would front run a risk off cycle for equities. Focus is on upside acceleration levels that would bleed into...

Thomas Schroeder

TMI Snapshot: Financial Conditions, Wall Vs. Main & Biden Stimulus Via Text-Mining

Worries on tightening financial conditions are now joined by concerns on the costs of fiscal stimulus following the unveiling of Biden's plan; but...

Elan Gore

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