The Yen is looking weaker, both against the USD and the NZD
...Will it last the week?
Monday, 9 February 2009
Friday, 6 February 2009
NZD Update, maybe a "freeze" trade looming?
After much debate with myself, I have left both the long position (NZD2m @0.5668) and the short position (NZD4m @0.5150) in place, still net short NZD2m.
Given the back pedaling from the ratings agencies this week, all is not as it seems. I suspect the government has been active behind the scenes, looking to stop a possible downgrade. It was the threat of a downgrade that caused the NZD/USD to drop from 0.6000 to 0.5300 in the first place. Then cutting interest rates by 1.5% pushed the NZD even lower to 0.5000.
If the NZD/USD develops a range between 0.5000 and 0.6000 in the weeks ahead there may be opportunities both sides of the trade.
So I may buy back NZD2m in the low 0.5000 area and move to net square then trade both sides from there.
Not sure yet, but leaving both trades open gives me some options........
Given the back pedaling from the ratings agencies this week, all is not as it seems. I suspect the government has been active behind the scenes, looking to stop a possible downgrade. It was the threat of a downgrade that caused the NZD/USD to drop from 0.6000 to 0.5300 in the first place. Then cutting interest rates by 1.5% pushed the NZD even lower to 0.5000.
If the NZD/USD develops a range between 0.5000 and 0.6000 in the weeks ahead there may be opportunities both sides of the trade.
So I may buy back NZD2m in the low 0.5000 area and move to net square then trade both sides from there.
Not sure yet, but leaving both trades open gives me some options........
Thursday, 29 January 2009
NZD Update
Cut the long NZD position.
Sold NZD4m at 0.5150, thus taking the long position out and taking the hit and turning it into a NZD2m short position.
I don't like the NZD, just too much bad news and offshore investors taking fright. Export interest has not assisted the NZD, and if it can't rally in January, it can't rally at all.
I have a target now of 0.4500.
Will review if we see a break above 0.5500.
Sold NZD4m at 0.5150, thus taking the long position out and taking the hit and turning it into a NZD2m short position.
I don't like the NZD, just too much bad news and offshore investors taking fright. Export interest has not assisted the NZD, and if it can't rally in January, it can't rally at all.
I have a target now of 0.4500.
Will review if we see a break above 0.5500.
Wednesday, 28 January 2009
Position update
Still in all open positions...none of them making any money.....yet!
At least vols continue to drop. As one trader said markets today are "mountains up and mountains down"
Oh well, patience is meant to be a virtue!
At least vols continue to drop. As one trader said markets today are "mountains up and mountains down"
Oh well, patience is meant to be a virtue!
Tuesday, 20 January 2009
NZD/USD update
Getting worried about the EUR/USD slipping lower, with 1.3000 a big level, and looking to test lower. This may drag the NZD/USD and the AUD/USD lower. My position in the NZD/USD is not looking good, and I am unhappy with the reaction to the S&P comments last week.
So may cut position out if we move below 0.5200 in next few days.
The NZD does not look like a winner now, and when I feel this way, it is usually best to cut and run.
We'll see......
So may cut position out if we move below 0.5200 in next few days.
The NZD does not look like a winner now, and when I feel this way, it is usually best to cut and run.
Thursday, 8 January 2009
More in-house financing next year, say CFOs at manufacturers
This is interesting data - KT
Recession? What recession?
Half of the CFOs at manufacturing companies recently surveyed said they expect their company’s revenues to go up in 2009, while nearly four in ten said they were predicting increased earnings.
Remarkably, over half of the finance chiefs said that the current state of the economy will have no impact on their growth plans. In fact, nearly seven in ten CFOs said they expect to boost the price of their products in 2009. That’s a fair jump from the 56% predicting price hikes last year.
The survey, conducted by Granite Research Consulting for Bank of America Business Capital, elicited responses from some 600 finance chiefs at mid-size and large manufacturers.
“Overall, these results reflect the severity of the current economic downturn and the uncertainty about how long it will take to work our way out of it,” said Mickey Levy, chief economist for Bank of America. “But, CFOs are taking necessary steps such as trimming inventories and operating costs in order to remain competitive, as they try to weather the storm.”
Indeed, only about a fifth of CFOs indicated that their capital expenditures for next year will be higher. Last year, about a third expected an increase in capex.
Meanwhile, 40% of finance chiefs expect to spend less or refrain from making capital expenditures altogether in 2009.
Nevertheless, about 80% of the CFOs surveyed said their company’s borrowing needs will either increase or stay about the same in 2009. While half of the finance chiefs indicated that credit availability has remained steady over the past twelve months, about a third said their lender has restricted credit availability. Last year, only 10% said they were expecting a shrinking of available credit.
And while nearly 60% of the respondents are considering financings next year, over half plan to use internal means to raise the cash. The most likely type of capital-raisings? Cash flow financing, asset-based financing, and leasing.
Given that response, it’s not overly surprising that CFOs said cash management (63%) and letters of credit (59%) remain the most commonly purchased services from banks.
John Goff, Financial Week, 11 December 2008.
Recession? What recession?
Half of the CFOs at manufacturing companies recently surveyed said they expect their company’s revenues to go up in 2009, while nearly four in ten said they were predicting increased earnings.
Remarkably, over half of the finance chiefs said that the current state of the economy will have no impact on their growth plans. In fact, nearly seven in ten CFOs said they expect to boost the price of their products in 2009. That’s a fair jump from the 56% predicting price hikes last year.
The survey, conducted by Granite Research Consulting for Bank of America Business Capital, elicited responses from some 600 finance chiefs at mid-size and large manufacturers.
“Overall, these results reflect the severity of the current economic downturn and the uncertainty about how long it will take to work our way out of it,” said Mickey Levy, chief economist for Bank of America. “But, CFOs are taking necessary steps such as trimming inventories and operating costs in order to remain competitive, as they try to weather the storm.”
Indeed, only about a fifth of CFOs indicated that their capital expenditures for next year will be higher. Last year, about a third expected an increase in capex.
Meanwhile, 40% of finance chiefs expect to spend less or refrain from making capital expenditures altogether in 2009.
Nevertheless, about 80% of the CFOs surveyed said their company’s borrowing needs will either increase or stay about the same in 2009. While half of the finance chiefs indicated that credit availability has remained steady over the past twelve months, about a third said their lender has restricted credit availability. Last year, only 10% said they were expecting a shrinking of available credit.
And while nearly 60% of the respondents are considering financings next year, over half plan to use internal means to raise the cash. The most likely type of capital-raisings? Cash flow financing, asset-based financing, and leasing.
Given that response, it’s not overly surprising that CFOs said cash management (63%) and letters of credit (59%) remain the most commonly purchased services from banks.
John Goff, Financial Week, 11 December 2008.
Friday, 2 January 2009
Position update
Here are the trades I am active in:
USD/JPY
Long USD 3m short Yen at 103.10 average. (reopened again at 89.63 after freezing at 96.97)
Current rate: 91.10
Current: loss
Comment:
See today’s post on Yen thoughts.
Short USD3m against JPY taken at average of 96.97 closed at 89.63, generating gain of USD245,676.67, NZD423,580.47 (not counting carry interest).
NZD/JPY
Long NZD 2m short JPY at average of 54.54
Current rate 52.70
Current: loss
Comment:
I am increasingly comfortable with NZD/JPY carry trades. Will add more if a solid break above 0.6000 is seen in the NZD/USD.
Review at 41.87, being long term lows.
EUR/USD
Square
Current rate 1.3844
Comment:
I can’t make my mind up on EUR/USD. I could see it go either way, so best to stay out of it.
Anyway I have enough up elsewhere to cope with!
AUD/USD
Square
Current rate 0.6930
Comment:
I am watching the CRB index closely, and if this starts to point higher, I will add a position in the AUD/USD. But needs to break up through 0.7100 and sustain it to be more confident.
NZD/USD
Long NZD2m short USD at average of 0.5668.
Current rate:0.5780
Current: gain
Comment:
I have posted before my reasons for the NZD/USD testing higher over the summer.
See here.
Previous balance: NZD1,051,735.00
Plus JPY gains of NZD423,580.47 above
Total gains banked since August 2007:
NZD1,475,315.47
USD/JPY
Long USD 3m short Yen at 103.10 average. (reopened again at 89.63 after freezing at 96.97)
Current rate: 91.10
Current: loss
Comment:
See today’s post on Yen thoughts.
Short USD3m against JPY taken at average of 96.97 closed at 89.63, generating gain of USD245,676.67, NZD423,580.47 (not counting carry interest).
NZD/JPY
Long NZD 2m short JPY at average of 54.54
Current rate 52.70
Current: loss
Comment:
I am increasingly comfortable with NZD/JPY carry trades. Will add more if a solid break above 0.6000 is seen in the NZD/USD.
Review at 41.87, being long term lows.
EUR/USD
Square
Current rate 1.3844
Comment:
I can’t make my mind up on EUR/USD. I could see it go either way, so best to stay out of it.
Anyway I have enough up elsewhere to cope with!
AUD/USD
Square
Current rate 0.6930
Comment:
I am watching the CRB index closely, and if this starts to point higher, I will add a position in the AUD/USD. But needs to break up through 0.7100 and sustain it to be more confident.
NZD/USD
Long NZD2m short USD at average of 0.5668.
Current rate:0.5780
Current: gain
Comment:
I have posted before my reasons for the NZD/USD testing higher over the summer.
See here.
Previous balance: NZD1,051,735.00
Plus JPY gains of NZD423,580.47 above
Total gains banked since August 2007:
NZD1,475,315.47
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