General Chit-Chat

[Xerof]

Guys,


Looks like we've bagged a few baby elephants this week guys. Next week we'll go after the 'bull' elephants and try to bag them [^][^]


Pleasant weekend to all

Xerof

[arco]

Good Morning All

Yes, I might even be able to assist with the US debt
if I cash up now

Lots of calcs to do now to see where/when we might get a
swing, and to try to take advantage of that if possible.

Good weekend all

arco

[Xerof]

Decidedly quiet out there in Forexland this morning. Which camp is going to make the first move?

My initial view is that some USD longs may be tempted to take profits, but seems to me rallies should be very limited - I think we have seen a significant breakout of the ranges, and will see this continue.

Perhaps GBP rallies back to 1.86, Eur to 1.2730, Chf to 1.2160. Not so sure about commodity bloc - to me they look to be in a spot of bother - CRB index falling away now, which will also keep USD bid, so IMO only limited rallies for NZD, AUD and CAD

Xerof

[arco]

Good morning Xerof

Just another Manic Monday

I have closed all short term a/c positions awaiting
the market direction. Hard to decide which way they
will jump in the short term. Medium term still down IMO.

Auto orders are placed below recent low/high, and
will trail them if they retrace.

arco

[Xerof]

Good for you Arco, so there's a big buyer of NZD this morning as he repatriates his profits

I'm tempted too, have already closed USD/CHF, but waiting for Asia open to see early action on dollar bloc, as not seeing wave 5 completion just yet. Have tightened stops on NZD and CAD, but looking for that extra mint wafer, Mr C

Xerof

[slam]

I have just tightened stops on all 4 shorts to the last run down on the 30min chart.will keep moving stops as day goes. If they break the 30min chart trend for the last 3 days, Im out.
Not keen to sell yet.[8)]

Cheers
Slam

PS Shorts NZD/EUR/GBP/AUD all against the USD.

[GBPNZDBASISTRADER]

Hi Xerof..
I thought i better say something here as your quote below is quite mis-leading;

quote:Originally posted by Xerof


BTW, what I meant by my comments a couple of posts ago is that the uridashi arranger will always buy the currency just prior to the issue, ideally forcing the rate higher, then its all sold to the retail customers, leaving the arranger with not only lots of fees for arranging the issuance, but also a nice profit out of the currency side of it too.

So in the past week the strong buying of NZD has been related to the 752mill issue announced last night (IMO)


Xerof

I am a IR derivatives trader for an offshore bank, and I am involved in these deals everyday. As the arrangers of these deals we do not enter into the market to buy ccy, nor do the issuer. If we had to enter into the market to buy (like the $752mio as you have inferred Daiwa Securities have) we would be so busy doing that than anything else. We will have FX exposure on back of the basis swaps but not a huge amount. Sure, the buying can come into the ccy as the retail investor purchases the currency to buy the issue, but I think what you will find is that more times than not the issue is never fully pre-sold day one. This particular arranger in this issue is often happy to take down these bonds from the issuer (EBRD) and then on-sell them over time thru their retail network. They would not carry the spot exposure over the time they took to sell down the bonds - and would need to be selling to those who do not already have NZD assets and need those investors to buy the ccy to take them out of their position - at the historic rate they may have bought the currency at (or better). Then there are the redemptions that happen and often these get re-invested back into the same ccy so thus no fx txn's required at all.
If you look at the issuance that occurs globally on a daily basis, there is no way an arranger is buying the same face value of currency that the deal is in.. he'd be running some seriously long positions !! It is not a viable tactic for the bank to be doing.

Your overview on the issuance process though was pretty good!!
Though we are probably not at the climatic peak of issuance - as don't forget there are still countries needing to be run and debt profiles maintained... but, it has been a pretty stellar start to the calendar year issuance wise so it might just go quieter at the moment with the non-big dollar currencies feeling a bit of heat, and the street not too keen on buying assets after the recent rally in US interest rates... (and not to mention a few downgrades in the credit sector!).

regards

[Dazza]

hey i have been checking EW theory

how do u use it to trade?

all i can see, is using it to short really?

ie, u have points 12345 set, and also A and B

u predict where C should be... n provided other indicators also indicate it to be short...

then u short

am i correct? is this how u use EW?

how would u use EW to long a trade?

[Xerof]

GBPNZDBASISTRADER,

I may have been a little 'colourful' but regrettably not totally misleading. I too have experience in these issues, during the first major issuance/maturity cycle of Eurokiwi, and maybe things have changed, but I doubt it.

I accept what you say regarding this particular issuer, and the volume they may buy prior, but of course that doesn't really matter, as you have all the other punters out there willing to position themselves (frontrun) the announcement or issue.

Please don't be so naive to expect an ex-IB trader to believe that these up-coming issues aren't leaked, then pumped to blazes, maybe not by the arranger or issuer, but certainly by the punters with an interest to make money off the back of it

As I say things may have changed, but in my day, I could ask my spot trader and also every prop trader in the room how they were placed in Kiwi around the time of large issuances, and doubtless you know the answer.

Thanks for the response anyway - refreshing to have some discussion slightly off the topic of what to sell or buy

Xerof

[miner]

Getting a head start on a move,eg,USD/CHF and USD/JPY go the same way EUR/USD opp way(most of the time,when they don't = dodgy,and JPY often leads which way the next move will be),easy enough you say,mentioned tho as they confirm each other(as in not sure which way one is going,the other 2 tell you) and also 1 or 2 can move before the other enabling you to jump on before it moves.

This morning EUR/USD went south just before USD/JPY went north,so miss EUR but jump on JPY.

Anyway wet day here so back watching FX and just though would chuck a few thoughts in to the mix.

Cheers
Miner