IIFT Daily Note with Peter Brown

Profit taking dominates.

Posted by:  |  Time: 7:26 am  |  Topic:  |  Comments: 2
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What is becoming clear is that a lot of players long the US and Japanese markets are cashing in. The macro outlook has become less clear. Tapering in QE due to the improved economic conditions in the US is perceived a possibility. Some players are up in excess of 40% on Asian trades. Whether clients are demanding a cash in or the hedge fund managers are just being prudent, we don’t know. What is clear is that the rally has stalled for the time being.

Equity selling is leading to dollar weakness and some demand for gold. Trading conditions are going to be difficult and choppy for the near term, so be careful.

A little bit of jobbing may be in order.

Levels today are:-  Euro  1.3000  1.2920  S&P  1652  1636 to 1633 for support.

 

2 Comments

Mark Waters

May 30, 2013

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Peter,

Just have a few things on the above blog.

How does equity selling lead to dollar strength if they are correlated? The USD has lost 1.5% in the last week due to traders unwinding long USD positions.

How would USD strength cause some demand for gold surely it would be negative for gold as the commodity becomes relatively more expensive?

    Peter Brown

    May 30, 2013

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    Hi Mark.Thanks for the question.

    You are absolutely right. It should read dollar weakness. My mistake. a bit rushed this morning.

    I have corrected it and thanks for pointing it out. You were the only one!

    Regards

    Peter