These are strange times for global markets

Chris Weston

These are strange times for global markets. When you see a 425-point reversal on the Dow Jones and a 48-handle move in the S&P 500 on limited news, you know things are not quite right. You could easily explain the confusion with a quick assessment, as oil prices are sitting at... Show More

Follow the QE path and buy the CAC (and DAX)

Chris Weston

Follow the QE path and buy the CAC (and DAX). Over the years we have seen the FTSE and S&P exerting a strong correlation with the central banks balance sheet. With relative compelling valuations and a strong prospect of ECB enacting on QE I look at the set-up in the... Show More

Thoughts from today's trading session With the S&P 500 trading to a new record high and continuing to eye the top of the multiyear channel resistance, there...

Chris Weston

Thoughts from today's trading session With the S&P 500 trading to a new record high and continuing to eye the top of the multiyear channel resistance, there seem to be a number of countertrend moves taking place. Around the Asia region today, equities are generally offered, with the Nikkei leading the... Show More

I agree from a pure tech perspective with the short-term trend is clearly higher. The pair has failed to close above the 79 handle on a number of occasions. A close above 0.7900 and above the 24 March high of 0.7938 would be positive and signal 0.8200 could come into play. I still think the RBA cut, so would be closing out of longs prior to the announcement and prefer NZD shorts in the short-term as McDermotts comments make the prospect of a dovish RBNZ very high

On AUD/USD – technical buy signal generated -

They will keep buying in the private space so (after CBs/ABS) corp bonds look the next step. Think ECB wait to see how this all plays out and will see QE only when the French reform, which could be some way off. Still if we get a strong hint (not my base case) then markets should rejoice and it was always the Feds desire to end QE and hope other CBs take over There are other banks buying JGB's for benchmarking purposes but apart from that I cant see anyone else touching them!

On The fact that the EUR has broken the 3 October low of US$1.2501 is interesting, and stop losses have pushed the pair down to US$1.2437 -

50 DAY = 1295, 200 = 1298. Since 2000 we've seen 7 golden crosses, with 5 being profitable events, 2 negative...if you had bought on this development you would have done nicely, but that was because of the strong trend up to 2011. Since 2012 there have been two crosses and both have been poor indicators. Its all about the trend and with both MA's trading moderately higher, a cross is bullish, but it no way nearly as bullish as we have seen over the years

On A golden-cross for the yellow metal this week could see a $2000 gold price by late 2015. Based on data going back to 2000, a golden cross has led to a 50%... -

Against USD i see 110 coming into play, premised on increased eaing from the BOJ in April (to counter the rise in sales tax), while of course Fed paering will dirve US yields to 3.5-4% range and keep USD well bid. The JPY is hugely underowned right now and Japanese funds have been huge buyers of offshore assets..will this continue? I think it will but we will need to see Japanese inflation expectations increase and corps accross the board taking part in the pay increase we saw from Nomura last week

On Looking for a tactical buy on AUD this week -

We haven't seen the sort of upgrades yet from sell side to suggest that valuations are less of a concern. The S&P pulled back to 15.5x forward earnings on Oct 15 and is now back at 16.5x. The 5-yr average is 14.26x, but earnings growth on this quarterly is better. The falls in yields and gasoline at lowest levels since 2010 should also help

On US equity markets continue to power ahead -

true..plus you can throw in the bullish moves in the Dow Transport and Philli Semi conductor index

On Did we see a market capitulation -

sell JPY...of course that depends on what happens...worst case would be a debt write off, but this very low probability..all seems some way off, but they need to get debt down and that is a major task...while they do this they need to work out how to keep yields low..gold i'm sure will do well

On So the BOJ think they will exit its QQE (easing) program -

these figures are over the last decade

On Sell in May -

In Australia the ASX 200 has lost an average of 1.8% in May, with November behind at -0.7%. The financials are where we see the most pain, with an average loss of 3.6% (last two years the sector has been smashed though)..materials somewhat of a safe haven, with an average gain of +0.3%

On Sell in May -

CSI 300 - short term looks good, having rallied 9.4% since March 21. Momentum and trend indicators on daily looks constructive and the index held the 76.4% retrace of 2331 to 2077 move. I'd be a buyer of pullbacks if I could, but we cant trade this market...A50 cash is best option...this is the top 50 mainland companies, but futures trade in Singapore.. the correlation between the two is high

On The Chinese markets rallied with strength yesterday after an agreement was reached between the Chinese and Hong Kong regulators to allow greater freedom... -

Weak, really weak Alex. If you work off the 1st estimate of 2013/14, the intensions of $125b was well shy of the $137b many were looking for. Non mining intensions grew 1.5%, which is hardly enough to promote the 3.75% growth needed from the non-mining space to create total economic growth of just over 2% this year. This print could be telling and given I think inflation peaks mid-year and falls, the RBA will be concerned by this. A further decline in TOT and the market will start pricing in rate cuts.

On It's a big day for AUD traders with Q4 capex numbers due at 11:30 AEST -

sure, saw the cross the other week. Hard to back test what it traditionally means for gold as this is the 2nd DC on the weekly chart since 1997

On Time to think differently, time to buy gold -

Twitter..although i'm sure CNBC, CNN, Bloomberg, Sky Business will have the press conference (start 06:30 AEDT) live

On A traders playbook on the FOMC -

yah, they have all bases covered. I get their point, but agree with them that March is likely date. I think their spread of different probabilities highlights the market is clearly divided on when the Fed will taper.

On Morgan Stanley have March as its base case for tapering -

indeed, it was a big cut. I only have a headline, but I did see they expect a March taper, so I guess they are simply moving in line with that idea. Would be interesting to see its call on the USD, while also what supply side response would be given $1200 is seen a marginal cost of production

On BNP Paribas cut its 2014 gold forecast to $1095 -