Is a change in cycles & global macro era may be upon us? If so, commodity currencies look cheap.

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Quotable

And so, from hour to hour, we ripe and ripe.
And then, from hour to hour, we rot and rot;
And thereby hangs a tale.

--William Shakespeare

Commentary & Analysis

Is a change in cycles & global macro era may be upon us?  If so, commodity currencies look cheap.

Back on 5 July 2017 we shared a chart comparing the relative movement of stocks (S&P 500 futures index) to commodities (Reuters CRB index) and said then...

081917 stock comm ratio current.png

...So, longer term cycle analysis suggests a turn in the relative performance of both the dollar and commodities may be upon us.  An accelerated power shift to Asia could be the major global macro driver....READ MORE

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AUD/USD Rally to key Fib Retracement...

Interesting, yesterday's rally to the 61.8% retrace level...watching the hourly/30-min chart for a three wave move lower from this swing high at 0.7962....

Aussie job news - a mixed bag: 

SYDNEY, Aug 17 (Reuters) - Australia's jobless rate ticked lower in July led by a big bounce in part-time work while full-time employment fell, a mixed result that augurs poorly for wages growth and the course of inflation.

The unemployment rate slipped to 5.6 percent from an upwardly revised 5.7 percent in June as 27,900 new jobs were added, the Australian Bureau of Statistics said on Thursday.

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Key News

LONDON, Aug 17 (Reuters) - British retail sales growth slowed broadly as expected in July after a strong second quarter, as shoppers cut back on purchases of most goods other than food, adding to worries about a fall in consumer demand caused by higher inflation.

BRUSSELS, Aug 17 (Reuters) - Inflation in the 19 countries sharing the euro currency remained stable in July, European statistics office Eurostat said on Thursday, but the much watched core inflation metric excluding volatile energy costs and unprocessed food rose.

TOKYO, Aug 17 (Reuters) - Japan's exports rose for an eighth straight month in July on robust shipments to the United States and a boost from a weak yen, suggesting the economy is carrying strong momentum through to the second half of the year.

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Positioning

After taking some heat after the Fed Minutes yesterday, our positioned have gained back lost ground this morning. We are still looking for another leg up in the US dollar against the Europeans. 

Comdols made a nice move yesterday, watching for long opportunities there on a reaction to yesterday's sharp rally in CAD and Aussie...

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Don’t bury the buck just yet…

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Quotable

““Never say never”

― Charles Dickens

Commentary & Analysis

Don’t bury the buck just yet…

 We have fortunately have been positioning for a dollar rally, and happy with what we see so far. The key question: Is this move higher in the dollar a simple correction, or is a new bull trend in play?  We favor that latter, but without the gift of hindsight we remain open... READ MORE

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Forecasting, Causality, the Black Swan, and your Edge

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Quotable

"Those who have knowledge, don't predict. Those who predict, don't have knowledge. "

--Lao Tzu, 6th Century BC                                                                                                      

Commentary & Analysis

Forecasting, Causality, the Black Swan, and your Edge

In the real-world prices are driven by a tangled web of rationales which manifest into a complex array of feedback loops.   I think this explains why it is so painfully difficult to determine which variables lead and which follow in a supposed correlation. The word “supposed” is used because correlation is not causality; and worst still, causality itself is suspect as Sir Karl Popper explains (below)...READ MORE

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