Weekly Review and Outlook

Weekly Reviewweek commencing 7/12/15

Last Week’s Key Themes

Euro sentimentNZD rate decision (sell NZD)CHF rate decisionCaution

Euro sentiment

EUR Index D1

NZD Rate Decision

Wednesday – 0.25% reduction as expected. “Monetary policy needs to be accommodative to help ensure that future average inflation settles near the middle of the target range. We expect to achieve this at current interest rate settings..."

NZD Index D1

CHF Rate Decision

CHF Index D1

Thursday – no change. “The Swiss franc is still significantly overvalued."

GBP Rate Decision

GBP Index D1

Thursday. No change, as expected. "The projected return of CPI inflation to the target depends on an increase in domestic cost growth..."

Last Week’s News Events

Oil down 10% on week. CAD suffers. Light news and volumes. The China Foreign Exchange Trading System moves from

measuring CHY strength against USD only, to a basket of currencies, showing the Yuan has appreciated by 2.93% since end 2014, despite weakening against the USD.

US Retail Sales on Friday – tradable and loss making (with small stop).

GBPNZD D1

entry

EURUSD D1

GBPCAD D1

AUDUSD D1

GBPJPY D1

whole channel

Weekly Review

Weekly Outlookweek commencing 14/12/15

USDX D1

WTI D1

WTI W1

S&P500

S&P500

All stock markets across the globe were down on the week.

May be moving to

RISK OFF

This Week’s News Events

Currency SummaryUSDThe USD is the strongest currency in the long term. Fed holds door open for December hike. Markets say 79% chance of hike in Dec. EURBearish due to QE. Portugal hovering like a bad smell. Draghi disappoints markets hugely on 3/12. Euro surges. Still fundamentally weak, but positive sentiment seen since Draghi’s announcement.

GBPStrong. Rate increase expected mid 2016. GBP gets caught up in USD weakness and is sold off. Carney says wage growth insufficient to propel inflation to 2%. Lower inflation now forecast by BoE. Institutions see rate hike delay from Q1 to Q3 2016. Focus still on non-existent wage growth.

NZDWeak. More rate reductions expected. RBNZ say recent NZD appreciation dampening inflation, making hike more likely. Markets say 50% chance of rate reduction in Dec. RBNZ say new reduced rate should be sufficient for monetary policy objectives.

CADWeak. Heavily correlated to WTI crude oil price.

JPYWeak due to massive QE. All eyes on oil price now to bring inflation up to 2% target in H2 2016. Kuroda says current policy sufficient. Now alluding to weakness in CPI.

CHFWeak due to negative interest rates. Swiss central bank often intervenes to weaken the currency. I have never traded this currency and probably never will. SNB re-iterate their view that currency very over-valued. AUDNeutral. Central bank dovish at Aug rate announcement seeing no need for more rate reduction. RBA’s Stevens remains confident all is on track. Stevens remains neutral but says any change will be to reduce interest rates.Great employment nos in Nov lessen any chance of rate reduction.

Neutral

GBPNZD D1

entry

EURUSD D1

GBPCAD D1

USDCAD W1

Current price last seen mid 2004.

USDCAD D1

AUDUSD D1

GBPJPY D1

whole channel

What is the risk position?Look after GBPNZD.Sell EUR.CAD vs oil.Tech trades – AUDUSD and GBPJPY.Fed rate decision.BoJ rate decision. Trading may be over for 2015.

This Week’s Key Themes