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The importance of today

I am sorry if the title seems dramatic (well actually I am not sorry since that is the point!) but today holds the key to the most important financial event for 2015. This afternoons US employment data (NFPs and unemployment) is the last key piece in the puzzle that will let us know if the US Federal Reserve is planning to hike or not. With expectations for a change in NFPs of 200K, expectations are high. However, given comments by Yellen about the current stage of the economy, she believes that at this point 100K jobs is sufficient for the current labour market.

What are three likely scenarios:

1.) NFPs meet or exceed 200K, the USD will gain on all the other majors, without exception.
2.) NFPs are below 200K but Exceed 150K, there will be a temporary lapse in dollar strength followed by a huge rebound.
3.) NFPs are less than 150K, the markets will panic and sell of the dollar as expectations of an increase in rates disappear.

Now you are all probably getting tired of my posts saying doesn’t this guy have anything better to do, so I will wrap it up. Our key fundamental basis at the moment is USD strength due to belief in a rate increase this month. All of our trades for the last 3 weeks have taken this consideration into account and every piece of data that has come out, we have examined whether or not it could possibly change the FEDs mind. At the moment my belief is that its not a matter of “What will make the FED move” but rather “What will stop them from moving”. Today if data disappoints it could deter them and we may need to rethink our strategy.

However, I remain optimistic about today’s outcome. We have the chance to drive this weeks profits even higher while at the same time, any losses would not put our account in jeopardy at this point. As always my intention is to achieve the results of previous months and finish the year on a high note. I am confident that together we will all do this!

13 Comments

  1. Thanks Mo. Keeping the account safe with minimal exposure at this time, I guess that is why the EurGbp trade was close. If there is any doubt rates are not going to be increased I also think there will be major market panic with dollar sell off. What is your view regarding a stronger dollar hurting the U.S. economy in regards to exports etc?

    1. A dollar that is overly strong does hurt the economy and that is why the FED do not like it that way. I feel this is one of the major reasons they keep emphasizing that they will increase rates gradually.

  2. I always enjoy your blog! I’m glad you write down your thoughts because I can’t read you’re mind!
    All the best for today.
    Regards,
    Andy

  3. It will take years for me to get tired of your posts, Mohammed.Your insights are like gold to me ! I can’t get enough of them.

  4. Thanks Mohammed. Never tyred of your thoughts. Dont give up. Really interesting keys To understand what is going on. Thanks again

  5. Mo my friend… we are NOT tired if your comments… that why we follow you!!
    You are an excellent trader with amazing insight to the financial and economical worlds!! Keep it up!!
    Patrick

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