25 March 2014 ~ Draghi Provides Opportunity

For the quick-firing trader there was money to be made today, on the back of ECB banker comments.

In the early afternoon (12:50 UK Time), ECB’s Makuch claimed members of the ECB board are prepared to take decisive steps if needed and one of the possibilities is adding liquidity.
6E behaved nervously and this was a sign of things to come… Harry Hindsight News Impact: 4/10

The Big Dog Draghi was scheduled to speak at the Sciences Po Conference in Paris, and at 16:15 UK Time he re-iterated that the ECB stands ready to take additional monetary measures.
Nothing new right? Well 6E took a considerable dive and it didn’t require a high speed supercomputer to get in on the action either.
On a Harry Hindsight Impact Scale, I’d call this a 6!


Data Released

And finally a bit of house-keeping to the 3 most noteworthy scheduled data releases of the session:

09:00 AM London Time saw the release of German IFO Business Climate – 110.7 vs Expectations of 110.9
To my surprise, the EUR moved a fair bit, albeit so quickly perhaps the best trade there was to fade it? Harry Hindsight News Impact: 3/10

09:30 AM London Time came and with it the release of UK CPI at 1.7% vs Expectations of 1.7%
Despite coming in bang in-line, 6B similarly put in a notable move, although no easy money in my opinion to be had. Harry Hindsight News Impact: 2/10

14:00 London Time saw US Consumer Confidence hitting 82.3, a good bit above the Expected figure of 78.5
The market (ES) response was muted, and the failure to rally was perhaps a reliable signal that the next move was to the downside. Several points were lost over the next half-hour. Harry Hindsight News Impact: 1.5/10

13 March 2014 ~ A quiet morning but an exciting afternoon

There was very little news to excite the EU session traders this morning, with not even the publication of a Think-Tank Report to generate interest!
But things certainly started to heat up as we approached the US opening bell:

* The key pieces of scheduled data for the day, US Advance Retail Sales & US Initial Jobless Claims came in close to expectations – although I did notice a serious exchange of contracts on the US Treasuries, with sellers seeming the slightly more urgent.

* Around 13:30 London time, Goldmans and Barclays reduce their US Q1 GDP expectations, and the US Treasury market started to churn higher and higher alongside FGBL, while ES and FESX conversely started to melt. Was this a reaction to Goldmans analysis? I doubt it was and without any specific news item to pinpoint as the driver, I’m chalking these impressive moves up to general market sentiment on the day.

* Perhaps most worthy of a spot on the Harry Hindsight Highlight Reel, was a statement released from ECB’s Draghi, saying real interest rate spreads between the Eurozone and rest of the world would probably fall, putting downward pressure on exchange rates. While FGBL remained very calm in light of release, 6E jerked lower repeatedly – although the move was far from clean and I expect money was lost by some Shorters too!

* By the time the results of a $13bn US 30Year bond auction came out (at 17:00 London time), the Treasury market had already moved far enough for one afternoon session and neither the Longs nor the Shorts had enough reason to shift price.

All in all an interesting afternoon session and a good opportunity to snatch some ticks on Draghi’s words.