US NFP job numbers tonight

C

Caput Lupinum

Well-Known Member
Silver Stacker
250k plus gold/silver/AUD fall - USD/sharemarket rises and Fed hikes

150k or less gold/silver/AUD rises - USD/sharemarket falls and Fed pikes

200k ish markets remain choppy and volatile with no clear direction

Either way, big night tonight :cool:
 
Very good.

What time in AEST do we expect to find out? Wondering if it'd be worth staying up for (curiosity mostly)
 
If it's a 250k + number I'll be selling the AUD and buying the UUP US dollar ETF

If it's a 150k - number I'll be buying the AUD and buying the GDXJ ETF

If it's a 200k ish number I'll remain sitting on the sidelines
 
Good to see someone with the b*lls to put their trades up in advance. Kudos.

My only hesitation in trading like this is I've seen the "buy the rumour sell the fact" happen so many times that I have become very wary of insider trading. There is *always* someone who knows more than me.

But....you may be right - and you should be right, so good luck with the trade.
 
This would be the rumour. Selling the fact would be whether the Fed raises or leaves interest rates in 2 weeks.
 
Came in at 173K - not enough for me to get involved. Metals are jumping as it's on the lower side, but I don't think it'll last. Wage growth came in higher than expected which will be bullish for the USD
 
Very interesting.

That's a reasonable spike upwards in PMs...though it's a spike downward in the $AU. Does your model need revision Caput?
 
PMs should follow the AUD down lower. The AUD was holding off on the NFP from the poor HK PMI earlier today. If China's shanghai sells off again on Monday and I wouldn't doubt it after the HK PMI, the AUD could finish next week at around 68 cents
 
Japanese markets are heading back into doom levels, S&P needs to break above 1970, if we break below 1900 things will get interesting
 
It'll continue to be volatile over the next few weeks. USD 2Y bonds which are the most interest rate sensitive are indicating a rate hike right now, but if China continues to sell off or a Fed official makes an off the cuff dovish comment over the next few weeks, the opposite will happen.
 
Caput Lupinum said:
If it's a 250k + number I'll be selling the AUD and buying the UUP US dollar ETF

If it's a 150k - number I'll be buying the AUD and buying the GDXJ ETF

If it's a 200k ish number I'll remain sitting on the sidelines
Click to expand...

problem is you can react after release.
money is made before the public knows
and banksters insider already done
 
ETFs are long term plays and I make money all the time after releases using forex and retracements of the trades
 
Schiffty makes plenty of valid points and looking at only the data and nothing else, the Fed shouldn't raise rates. One thing he didn't mention was the health of the rest of the global economy. If the Fed were to raise interest rates, it would cause a carry trade with the Euro and foreign capital would flow into the US as it's got nowhere else to go. The Dow blue chips would rally along with the US dollar, not because of the US economy is improving, but the rest of the world is in worse shape than the US and there is no decent yield to be found anywhere. Also the US has the luxury of being the WRC and a safehaven. The US would be raising rates at the expense of the rest of the world knowing it will cause a collapse, but they will still be the last ones standing until a new WRC can be found.
 
Caput Lupinum said:
If the Fed were to raise interest rates, it would cause a carry trade with the Euro and foreign capital would flow into the US as it's got nowhere else to go. The Dow blue chips would rally along with the US dollar, not because of the US economy is improving, but the rest of the world is in worse shape than the US and there is no decent yield to be found anywhere.
Click to expand...

Such a scenario didn't stop the RBA from lowering rates. :/
 
Caput Lupinum said:
If the Fed were to raise interest rates, it would cause a carry trade with the Euro and foreign capital would flow into the US
Click to expand...

For one eighth of a point rise (or whatever minuscule hike they may use)? Can you explain further?
 
Well it's not the one eighth of a point rise on its own, it's the forward trajectory of further rate rises in the near future coupled with low yielding bonds from Europe and Japan and the risk to emerging markets bonds.

Fed raises, the US bond and share market looks more appealing to foreign investors that have been parked in risky emerging markets for the past 5-6 years or yield starved European bonds which don't look to be going anywhere but further down after the ECB increased it's bond purchases from 25% to 33% of the market. Investors would borrow in Euros (large European wealth and sovereign funds) and invest in fixed USD assets knowing the USD is going higher on the back of interest rate rises whilst the Euro continues to lose ground as it does its QE program. Regardless of how poor the US economy is going, it's still in better shape that Europe (bar Germany) and Japan and now emerging markets at the moment.
 
What is the driving force for these moves? The "carry trade."

What is the carry trade? It's the borrowing of a currency in a low interest rate country, converting it to a currency in a higher interest rate country and investing it in the highest rated bonds of that country. The big trading outfits do this with leverage of 100 or 300 to one. This causes important moves in the financial markets, made possible by the trillions of dollars of central bank money creation.

The monetary stimulus in Japan is aimed to produce a cheaper yen, and thus a stronger dollar. That causes the U.S. bond market to rise, bond yields to decline, commodity prices to plunge, and precious metals prices to decline. If you are in any of these investments, you must know what drives their prices.

Here is how the "yen carry trade," a favorite currency for the trade, basically works now:

Hedge funds and other very big traders borrow the yen at very, very low interest rates now approaching zero.
The yen are converted to dollars, which are invested in U.S. Treasuries at a much higher yield than the interest cost for the borrowed yen. That creates a "positive carry" because of the differential in interest rates.
The buying drives up U.S. bond prices. The traders accrue big profits, when done with high leverage, assuming the yen value doesn't rise.
Additional profits are made when a) The dollar rises vs. the yen as the BOJ intends, b) U.S. Treasuries rise in price (as is happening)
Click to expand...

http://www.forbes.com/sites/investor/2014/09/04/carry-trade-the-multi-trillion-dollar-hidden-market/


With the ECB's main refinancing rate down to 0.05%, pushing its deposit rate all the way down to -0.2%, and engaging in QE, the euro represents the perfect funding currency for carry traders looking to borrow cheaply. Carry traders can then use these funds to invest in higher yielding USD treasuries when the Fed raises rates.
 
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