Highlights and outlook for August 13!
8/13 (Monday)
15:00 SEK Sweden unemployment rate
8/14 (Tuesday)
11:00 CNY China industrial production + retail sales
◎ Today's highlights
Japan is on Obon holidays, and Europe/US are also on summer break, making the market quiet setting is expected.
In such a context, Turkey, China, etc., can change rapidly from statements and other factors.
With fewer market participants, when positions and orders skew, prices can move sharply.
Risk management considering price gaps is important.
President Erdogan, in this situation, said “no rate hikes.”
“The current Turkish lira is not being evaluated correctly in terms of the economy,”
About Turkey, you never know what will happen!
Be careful with how you handle and with your counterparties!
There can be sudden stop-outs due to changes in margin maintenance requirements, etc.
The market opened with large gaps at the start of the week.
Although gaps are often said to close, given the situation, going long on the lira is difficult!
For Turkey, please refer to the following.
Turkish Lira crash! Turkey shock of August 10, 2018 summary
Also, looking at the charts, it feels similar to last year's Bitcoin chart.
It is unlikely to fall like Bitcoin, though...
USD/TRY daily chart
China yuan also showing a similar chart.
Over the past year, the yuan has fallen significantly.
We should also be cautious here.
USD/CNY daily chart
◎ Positions held and today's strategy
Only EUR/USD short position is held.
When Turkey collapsed along with the earlier drop, I closed once, but I re-entered.
EUR/USD on the daily chart appears to form a head and shoulders pattern.
On the timeframe, the price has broken below the range, so I plan to follow it.
EUR/USD intraday chart
In addition, the New Zealand dollar that I missed entering.
The NZD has fallen after a rate cut announcement.
If there is a chance, I am checking to enter if possible.
Regarding the NZD, I have summarized it here. Please refer.
RBNZ holds rates, NZD falls sharply
NZD/USD weekly chart
NZD/USD intraday chart
USD/JPY is under strong yen appreciation pressure.
Turkish shock, US-China trade war, and delay of US-Japan trade talks are among many negatives.
Euro strength also present, indicating a risk-off market.
Although the daily chart did not reach the upper end of the range, it is at a level where a reversal would not be surprising.
The next milestone is around the intraday chart “110.00” ~ “109.90” to see if it holds.
USD/JPY daily chart
USD/JPY intraday chart
When risk-off, I am concerned about rising interest rates.
In the recent Bank of Japan monetary policy review, they announced YCC (Yield Curve Control) flexibility.
I do not know when the operating target will be set, but the times “10:10” and ”14:00” are important for long-term yields.
10-year Japanese bond yield chart
Weekend leaders' remarks
Minister of Economic Revitalization Motegi
“We had frank exchanges with the United States on trade negotiations, and our respective views were deepened.”
“We will continue discussions on the second day.”
“The next US-Japan trade talks are planned for September.”
“Japan and the United States will reach an agreement on expanding trade.”
Aso Deputy Prime Minister and Finance Minister
“Differences between the US and Japan in the FFR are clear.”
Hammond UK Finance Minister
“There is a chance to reach an agreement on Brexit negotiations regarding trade.”
“Brexit uncertainty makes the UK economy enter a difficult period.”
“Brexit uncertainty is weighing on UK economic growth.”
President Erdogan of Turkey
“The dollar cannot obstruct our path.”
“Holding foreign currency assets in lira is in our national interest.”
“We cannot be ruined by pressure on interest rates.”
“We are prepared for every hardship.”
“We will not bow to any intimidation.”
“If you think economic pressure will force us to surrender, you do not understand us at all.”
“Solving problems through negotiation and diplomacy is the only way.”
Albayrak, Turkish Finance Minister
“We will unveil short-, medium-, and long-term economic policies.”
“The new policies will be sustainable.”
“We will push for cuts in public sector costs to achieve our goals.”
President Trump
“Directed to double steel and aluminum tariffs on Turkey.”
“Tariffs on steel 50%, aluminum 20%.”
Guajardo, Mexican Economy Minister
“NAFTA negotiations are going well, and we will meet again next week.”
Trump White House advisor Jay Sekulow
“We are close to a resolution regarding Turkey.”
BDDK – Banking Regulation and Supervision Agency of Turkey
“We will restrict swaps between Turkish banks and foreign investors.”
