You probably don't remember this but five or six weeks ago the market had a dip of about 5% due in part to the unwinding of the carry trade.Obviously I say this tongue in cheek as it appears the Aussie/Swissi pair does not remember that dip.
It has shot up very fast in the last month leaving all its worries behind. This is an interesting pair to watch in a VIX-like manner.
Australia and Switzerland are thought to be at different ends of the same spectrum such that Aussie strength means less fear. I don't know whether the Aussie has been this high before but it has not been this high in the last five years.
7 comments:
Hi Roger,
What's your view on Crude Oil right now? You think $78 (or around there) is the peak and we are in bear market until below $50 (like in the $40's) or $50 was the bottom of the correction and we are hitting higher then $78?
Depends on the time horizon you mean.
My guess is that it is too soon for a price above $75 to persist, but one day it will maybe early next decade or late in this decade?
A while back, quite a while I said that oil was done spending any meaningful time below $60 I'm not sure I was wrong about that one but then I kicked it up to $65 which does feel wrong for now.
I do think $50 will be a bottom, not to say we won't see it again though on a spike. Oil around here means good things, IMO, for oil companies even if crude itself is not a good trade which is one reason why I prefer the companies over the commodity.
Roger. It's never been this high before. But, caution. Switzerland has been raising rates. It's not a one-way bet. I think the potential for a serious rocking is at hand.
not a one way bet? exactly my point.
if you care, Nicole Elliott ( a pretty good technical analyst from Mizuho) is calling for NZDUSD to go to $0.83 or $0.84 in the next six months or so.
She is more in touch with the technicals than me and you are more in touch with the fundamentals than me but maybe it will be an instersting (read volatile) time?
The Aussie has been much higher than this relative to the US Dollar. But I read somewhere this is the highest it's been in sixteen years and that about makes sense.
against the greenback, yes the Aussie has been much higher but for the swissi no.
I know "tips" are not viewed kindly, for good reason. However, someone asked about crude oil. I think a win-win bet if they are interested in oil and clean fuel is EnCana (ECA). They recently inked a jv deal with Conoco Phillips to have EnCana oil sands crude refined by Conoco refineries there- a significant cost savings. Furthermore, Canadian natural gas inventories are over 30% lower than at this time last year and EnCana, a low cost producer with a huge natural gas reserve will profit greatly as it is replenished. This means less EnCana gas for the US market, which should be good news for Chesapeake (CHK), another well-managed (US) natural gas producer.
I know the above reads like a Cramer script, but this news has been out of the spotlight, and where better to share it?
Disclosure: I own both EnCana and Chesapeake.
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