Weak Housing number rocks markets

A weaker then expected housing number caused U.S. futures to rally, resulting in Emerging Markets doing marginally better. I have been clearly tossed around of late but I still like the lower Brazil and Mexican interest rate play against a higher U.S. rates. Mexico cut interest rates again today 25 basis points and Brazil is expected to do the same in a week or two. I also again sold dollars in Mexico (I will stop out above 10.96ish) and Brazil (2.18ish). I always find it easier to be short dollars in these currencies. I am however long dollars against the Euro. A stronger dollar is clearly the big picture trend and I do not see that changing in the near term.

These are the FX Trading Ideas for today.

FXTRADINGIDEAS@AOL.COM

Nervous Markets and a nervous trader

Sitting back today I realized that the trend in the last week has changed. Last Thursday we made new lows in dollar Brazil breaking 2.100 level (which was a triple bottom). Since then we have been steadily grinding higher. Current level 2.1720. The same story is occuring in Mexico. A few weeks back we were looking at 10.4000 level and today we are at 10.9100. I cut my dollar shorts in Mexico and Brazil. Tomorrow I will cut my short dollar Chile. Thing do not feel good to me. I still think in the big picture the dollar is heading lower against Latam markets (up against europe and asia) but sitting on the sidlines for the near term seems a prudent move.


These are the FX Trading Ideas for today


FXTRADINGIDEAS@AOL.COM

Emerging Markets Nervous

It seems to me that the markets are trying to take risk off the table. Iceland today had none of thier debt bought in the market (this is the second time in a row that this has happened). Try and Mexico have also been under tremendous pressure lately. The stimulis for this seems to be the view in the market that U.S. rates are going to continue higher. I agree with this view. The new FED chairman Bernanke was more bearish then I was expecting and any hopes of a near term slowdown in the current rate direction was dashed. I have cut down my risk in spot, although I do like the dollar overall and really think that the markets are looking for to much apprciation out of China. I continue to like the convergence of U.S. and Brazilian rates although I will watch this closely as if the currency gets hit hard the debt market could follow for the near term.

These are the FX Trading Ideas for today

FXTRADINGIDEAS@AOL.COM

Emerging Markets continue on a roll

Brazil and Chile in recent weeks have both eliminated the tax on foriegners holding bonds. Brazil this week recieved an upgrad from S&P (two steps away from investment grade). The Merval (the Argentinian stock Exchange) made new highs today. All in all it is a signal to me to stay invested in Latam EM. A story making the rounds recently has been the elimination of the Quantitative easing by Japan. This is in the process of happening and by looking at Japanese interest rate futures rates are begining to rise. Last night a key number was released CPI. After many, many, many years of deflation we are begining to see the signs of inflation reappearing. So what does the market do but SELL YEN. Buy the rumour sell the fact. I do see rates in Japan heading higher but VERY VERY VERY slowly. The last thing that the Japanese government wants is to stall their revovery before it grabs hold (they have done this in the past).


These are the FX Trading Ideas for today.

FXTRADINGIDEAS@AOL.COM