Good afternoon. So a few things about the data this morning. In line with our expectations, as posted yesterday, the Caixan PMI was slightly better than expected. With that said, it was still a soft figure but did not rattle the markets (more on this later). The UK data confirmed some of our suspicsions:
Manufacturing was better than expected, shown by PMIs revised upwards in December and beating expectations in January to show that there has been actual growth these months (rather than contraction). This bodes well for the UK economy.
The housing market in the UK is NOT losing steam.
Despite both these fundamental clarifications which helped the cable rally to 1.4320, it was followed by a massive sell off (as we predicted) due to negative sentiment on the Sterling over fears of the BOE and Brexit.
Later this week, we will see how the service sector in the UK has grown. So far this sector has outperformed all others and has been a major driving force in the UK’s growth. Should it grow again in line with expectations then perhaps growth in the UK will not be as anaemic as many expect the BOE to forecast on Thursday. Keep an eye out for this data. With other regards to the BOE and inflation, I feel I have covered my feelings over their pending inflation report over the last few days and why I do not expect it to be as soft as many think (while I still believe it is far short of their target of 2%.) Let us see if we are right on Thursday.
Back now to the Chinese PMIs, I was thinking more about this earlier today and while we can see that Manufacturing is dropping, Services are improving. I feel this may be part of China’s long term plan to reform their economy into one that is consumer based (like much of the western developed worlds) and feel that longer term, this is actually a good thing. Just my random and probably deluded thoughts, but its just something to consider over the longer term.
Our plan to go long on Japanese equities paid off handsomely today, thanks to a good performance by the Japanese equities.
We have put in an order to Sell EURUSD at 1.0904 and our other positions recovered a little today, so things are looking less bad.
We took two shorts out on AUDUSD and AUDCAD. These are in line with my post yesterday that I believe the AUD will fall following the RBA statement this week.
With regards to some questions I have been getting, please let me answer this for the last time:
I am not leaving Etoro permanently and moving to HF entirely until I have either cleared up this mess I have gotten us into, or feel that I have repaired things as far as I can. However, I do aim to do this before Q1 2016, as explained yesterday.
HF is completely different from anyoption in my trading strategy. The plan on HF is not to touch any of the funds for 2 years, and let it compound. I hope to achieve a similar result to what I did solo trading on SAXO and on Etoro last year (minus the ultra unhappy endings). It is not for people to join, if they can not commit their funds and not touch them for this long period of time (hence why I left the amount to join as low as possible). Anyoption is a much higher risk method where you can place options based on trade ideas (and eventually copy me, once I move my attention from Etoro to there.). It will be more of a pocket money generator that people can feel free to take and spend as they like (should they profit of course). Those who wish to take lower risks (for smaller amounts) or even learn about options (in demo mode) can try the iqoption that really I recommend as a practice platform before getting seriously involved in solo option trading (for short expiration periods).
Moving on, the highlights for the rest of today are US income and spending and Draghi’s speech (at which I believe he will make waves). Let us see what they bring us. I hope that this month goes as well as the end of last month, and we do not lose the positive momentum or energy we got these last 10 days after a dismal start of the year. Hopefully the negative chapter is all behind us,