Daily Alert: For Wednesday 16th March 2016

Mark Nugent2016 H1, Daily Alert, March 2016

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Video Below
Fundamentals and Sentiment – New Information (Economic Calendar)

The markets have been risk-on so far this week.

Tuesday: RBA policy minutes was released for the March 1st meeting where rates were held as expected at 2.00%. The minutes reiterated the view that low inflation would lead to further easing.

Bank of Japan kept QE unchanged at JPY80trillion per annum (vote 8-1). Interest rates were unchanged at -0.10% as expected (vote 7-2).

Fundamentals and Sentiment – Market Reaction

The Vix is essentially unchanged from Monday at below 17. All stock markets down except China. Oil drops for the second day. Commodity basket and copper flat. USD index rises for second day, as does JPY. Commodity currencies down today.

Fundamentals and Sentiment – Financial Media

http://www.bloomberg.com/news/articles/2016-03-15/kuroda-holds-fire-on-stimulus-as-japan-digests-negative-rate
http://www.bloomberg.com/news/articles/2016-03-15/u-k-rate-cut-odds-are-rising-and-brexit-could-tip-the-scales

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Trades

The key risk event for the week is the Fed’s FOMC Economic Projections on Wednesday.

1. S&P500

I will wait for Wednesday’s Economic Projections from the Fed.

2. USDCAD

After yesterday’s decline in oil and strengthening in the USD, I placed a pending long order at the top of yesterday’s wick. Tight stop of around 100 pips vs ATR of 142 pips. Stop moved to breakeven and currently 54 pips in profit. 1% risk.

3. EURGBP

Still in consolidation zone.

4. AUDUSD

Similarly to USDCAD, I saw a move down on Monday night’s close and a strengthening USD which prompted action prior to Wednesday’s Fed announcement. I placed a pending short at yesterday’s low. Triggered today. Stop not quite at yesterday’s high, 90 pips vs ATR of 98 pips. Now at breakeven. 1% risk.

5. FTSE100

Consolidating at top of channel. A pessimistic Yellen may well cause the FTSE100 to fall due to general concerns around the global economy. A move down through 6055 and a close is a potential sell signal.

6. USDJPY (JPY weakness – from prior week).

This trade is clearly going nowhere. As I mentioned in the Weekly Review and Alert, I assessed the trade at Monday’s close and exited for a tiny loss.

Tomorrow

The Fed is the highlight. My money’s on bullishness. The Economic Projections are not out until 6pm GMT so I will delay the Daily Alert until I have digested the contents.

Video

Your video is below (the detail on the trading plan starts at 5:03).

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