Global Macro Trading (runnermint)

Turkish stocks fell 10.5% in a single day (6/3/13) due to anti-government demonstrations. Considering Istanbul 100 gained a whopping 81% due to positive structural reforms and an upgrade of sovereign debt rating to BB+, the index might be overbought and I think this sell-off may carry on for some time due to profit-taking and panic selling

Potentially, I envision the following trades which may be viable:

1. Buy on dips. Fundamentals are still stable and sound. Turkey's PM seems confident he's able to reduce political uncertainty and risk

2. Sell on this pull back. Seemingly, this pullback might be a protracted one as even the traditional defensive sectors are being sold as well. However, trades that involve politics are harder to manage because if market participants feel better about the situation, the index would rally on the back of renewed faith in the government

these are surface observations and explanations. more reading and research could be done on this
 
Quote from runnermint:

Turkish stocks fell 10.5% in a single day (6/3/13) due to anti-government demonstrations. Considering Istanbul 100 gained a whopping 81% due to positive structural reforms and an upgrade of sovereign debt rating to BB+, the index might be overbought and I think this sell-off may carry on for some time due to profit-taking and panic selling
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I will be tracking iShares MSCI Turkey Index Fund closely. Have not develop a bias yet
 
Hello runnermint, over what period was the 81% rise in turkish stocks?

Also, you mentioned that you are monitoring the yuan. Are you also trading it and if so, how?

I also follow the other markets you mentioned.
 
Quote from runnermint:

Hi ghost,

What's your take on nikkei?

runnermint
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Well by now I think it's made the majority of its decline, but wouldn't surprise me if it goes a bit lower first before bottoming. So I am flat and would look to go long on weakness.
 
Quote from Visaria:

Hello runnermint, over what period was the 81% rise in turkish stocks?

Also, you mentioned that you are monitoring the yuan. Are you also trading it and if so, how?

I also follow the other markets you mentioned.
More...

Hi visaria,

1 year lookback

i'm contemplating to take a position in spot usd/cny cross. but the spread and amount of margin required are not ideal for a short-term play

we could trade NDFs (non-deliverable forwards) on the cny as well. however, i believe, this is only available to the big boys and prime brokerages transacting over the interbank market

i'll be looking at the upcoming industrial & electricity production data to judge the momentum of the economy. China is poised for a slowdown but a hard/soft landing is not definitive at this point in time. This depends on how the Chinese economy performs in the second half of 2013, given a mediocre first half

runnermint
 
A follow-up on Turkey's situation:

one of Turkey's biggest trade unions has announced a two-day strike as a form of support for anti-government protesters.

benchmark 2y-,10y- rose to 6.48% and 7.12%, respectively

more selling to come?
official statement from government not strongly worded?

i have went short on the aussie dollar, here's why (in short notes):

- asset purchase liquidity and foreign investments in mining-related sectors in Australia during the commodity supercycle and China's phenomenal expansion phase have contributed to strong aussie dollar

- however, as central banks discuss their exit strategies, China facing growth headwinds and with commodities entering bear market, aussie dollar will drop in value

- with its current account in deficit and coupled with reduced foreign investments, makes imports more expensive and exports cheaper (in relative terms)

- recent RBA cut in May helped little to prop up growth and reduce unemployment rate. the GDP qoq read that came in this morning was lower than expected and its slowest rate for the past 7 quarters

a possible long term play?
 
i have closed the following 2 positions:

short JPY
short Nikkei

some interesting observations:

although the 3 major US market indices, the VIX index and the sell-off in gold have reacted in tandem to the positive non-farm employment change data, i think the market tone still remains in selling mood so long as the tapering talk lingers in the marketplace

we learnt that the Federal Reserve has a 6.5% unemployment rate target to meet before it scales out the monthly bond-buying programme and that today's data has showed that the unemployment rate increased by 10 basis points to 7.6% for May. concretely, this implies the central bank will continue the bond purchases and some may start to expect a resumption of the liquidity-induced rally. however, there are two market observations that do not run in accordance what one would expect in a resumption

we note that the USD is range bound and this is reflected with the G8 crosses as well. the underlying weakness in USD may continue next week as the FX market is perhaps, trading off the poorer than expected ISM data

moreover, the 2s10s spread actually widened at today's market open. a priori, we should expect the yield on short-end going down and yield on long-end going up if the market still believes in the QE story. however, the spread widened instead

furthermore, from a technical viewpoint, 10y- and 30y- bond futures seem to have more room for selling.

i get the sense that the marketplace is waiting for reassurance from Abe & Kuroda next week. if that proves to be insufficient, we can expect more selling in major indices until the June's FOMC meeting on the 20th

in other news, i'm holding the AUD short and looking to scale in a bigger size within next two weeks. based on the research and the outlook i have about the Australian and the Chinese economy, it looks worrying and there's a chance Australia will be entering a recession soon
 
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