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Global Macro Trading Journal
- Thread starter Daal
- Start date
Quote from m22au:
part of me wants to bottom dip on EUR/CHF, but then I realise that if the Swiss don't intervene, and Italy 10y goes above 7%, then parity could happen but the end of the week.
It's amazing isnt it but remember where it comes from.
It used to be 1USD = 5 CHF in the seventies....
Who is to say where it will end.
Quote from Debaser82:
It's amazing isnt it but remember where it comes from.
It used to be 1USD = 5 CHF in the seventies....
Who is to say where it will end.
One possibility of where it ends is that Switzerland might implement their own intervention / money printing. This will become a stronger possibility if and when the strong CHF hurts economic growth. Disclaimer: I don't know much about recent performance of Swiss economy.
Having said that, USD/CHF 0.7730 looks like a potential multi-day bottom, as does EURCHF 1.1027. I just don't have the courage to bottom-fish on either.
Quote from m22au:
part of me wants to bottom dip on EUR/CHF, but then I realise that if the Swiss don't intervene, and Italy 10y goes above 7%, then parity could happen but the end of the week.
Its my understanding that if the Italians have to pay above 5% on the 10's its panic time and anything around 6 is gonna be Greece Redux.... as for the CHF Its never appeared to me that they give a hoot about where their FX goes ... exports such a small % of their economy look for them to chuckle as Euro/CHF goes to parity. Probably giving the US the finger along the way for f'ing with their banking secrecy.
They do give a hoot, especially the SNB, which is very long EURCHF. Moreover, the Swiss economy is sensitive to EURCHF and there have been discussions of some possible exchange/capital controls. To be sure, we're not quite at that point yet, but we're moving ever closer.
As to Italy, 6% in 10y isn't the end of the world. It's bad, but not unmanageable. 7% or 8% on a 10y for either Spain or Italy and it's alles kaput, though.
As to Italy, 6% in 10y isn't the end of the world. It's bad, but not unmanageable. 7% or 8% on a 10y for either Spain or Italy and it's alles kaput, though.
Quote from Debaser82:
It's amazing isnt it but remember where it comes from.
It used to be 1USD = 5 CHF in the seventies....
Who is to say where it will end.
^^^ Correct. This is why I have to laugh (or cry) at folks worried about a ratings downgrade for the U.S. ... wake up idiots, the markets have already downgraded the U.S. into oblivion. Just because the U.S. can never default (because it prints the currency in which its debt is denominated) doesn't mean the country is the slightest bit creditworthy. Moody's, et al are decades late to the party.
FWIW, put up a chart of gold vs. the S&P since Nixon closed the gold window. 40 years of printing money (with a short respite under Volcker) has worked wonders. Like I said, decades late to the party.
Quote from m22au:
One possibility of where it ends is that Switzerland might implement their own intervention / money printing. This will become a stronger possibility if and when the strong CHF hurts economic growth. Disclaimer: I don't know much about recent performance of Swiss economy.
Having said that, USD/CHF 0.7730 looks like a potential multi-day bottom, as does EURCHF 1.1027. I just don't have the courage to bottom-fish on either.
I was thinking about going long either of the above pairs. Reading your post has convinced me that it is the time to go long Eurchf for a multi-day bounce. To reduce my risk (from us downgrade) , I closed my long usdjpy position (which was also a bottomfish).
Long at 1.1101
We will see how it plays out.
Quote from ralph00:
^^^ Correct. This is why I have to laugh (or cry) at folks worried about a ratings downgrade for the U.S. ... wake up idiots, the markets have already downgraded the U.S. into oblivion. Just because the U.S. can never default (because it prints the currency in which its debt is denominated) doesn't mean the country is the slightest bit creditworthy. Moody's, et al are decades late to the party.
FWIW, put up a chart of gold vs. the S&P since Nixon closed the gold window. 40 years of printing money (with a short respite under Volcker) has worked wonders. Like I said, decades late to the party.
This is why I find credit ratings on countries with monetary autonomy a bit amusing. There is rarely discussion of this basic concept, ie, USA (and many other countries) can just print away their debt if required.
Like you said - stealth default has been taking place for years.
My core strategy for years has been long gold / short S&P 500. Early this year I started shorting specific oil sensitive stocks (instead of S&P 500) with the view that money printing = higher oil = bad for airlines and other oil sensitive stocks.
See thread here:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=213873
for more detail