Monday, January 16, 2006

Choppy month with little direction so far....

Markets have been a bit choppy so far this year. The Fed mintues from earlier in the month gave the impression to the markets that an end to the current tightening cycle is within sight. IF this is correct this should be VERY good news for Emerging Markets. I remain Small short dollars against Brazil,Mexico, Chile (uugghh). I am also short rates in both Brazil and Mexico. This has been the trends and until the market kicks me in the pants I will stay with these trades.

The big dollar is very interesting to me. I think that it is to low against Jpy. Carry is a very important eliminte to this trade but I think that it is due for a bounce (I am square currently looking for a sign of strength to buy). We have been basically sideways to a lower dollar since the beginning of the year (against Asia we are well off) but I am not convinced this move can sustain itself.

These are the FX TRADING IDEAS for today.



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