This week we are holding the following positions. Sold Eur/Usd, Gbp/Usd, Gbp/jpy and bought Usd/Chf. These positions have played out as expected and are showing the following gains respectively +0.13%, +0.47%, +0.99% and +1.11% . What has moved these positions we ask? Let's go over some of the possibilities.
Thursday retail sales for the month of November were released with an increase of +0.28% over October. That increase definitely caught me off guard, I'm going to say the drop in oil was a huge reason behind this. Whether oil was dropped to punish certain countries or to boost our holiday sales is up for debate, either way we will see it as a short term gain. Unemployment initial claims also came in positive with a drop from 297k down to 294k, which is a positive move of 1.01% for the USD. What do I think of the unemployment numbers? ,well if you guessed bollocks you are correct! I don't think any data could be more skewed than one where people are not counted after a certain amount of time or whatever the parameters are, but then again, I also would never have guessed that oil was going to come back down and the Indexes would be climbing to new highs. Yeah anything is possible, you just have to roll with it. If there are enough people to believe the data and move the market, jump on. Also looking at Michigan Sentiment that came in higher than the previous month. Not sure if you have looked at this one, but it is accumulated from a survey of 500 telephone calls then has a funky formula that rounds up numbers to get the monthly data score. O.k, this data is totally dependent on peoples emotional state, as far as I can tell there is close to zero numerical (my word) to back this up. Usually in the past I would have discounted this data based on those facts, but I have learned that these markets at times will not follow any fundamentals at all, will totally move off peoples emotions states. Is it a reliable data release? Hell if I know.
We will continue to hold these positions for the next few days and see how we end up. It has only been 24 hours and the trades are doing awesome! More data is sure to be coming out this week and we'll be going over it in relation to the trades. I will be updating the blog in reference to the other side of the trades. The Euro, Pound, Swiss Franc and Yen.
Have a great day -Pablo