NZD and RBNZ: Levels, Ranges, Targets

Why follow and trade NZD at current 0.6300’s is because its the lowest exchange rate among all 28 Currency Pairs and only competes with CAD/CHF at 0.7500’s and EUR/GBP at 0.8600’s. As lowest exchange rate, NZD provides best signal and insight to all currency pairs.

A break above for example to wide range EUR/USD and GBP/USD without follow through by NZD warrants caution to a false move higher by wide rangers. Conversely, NZD follows through to the downside.

Consider the distribution

GBP/USD 1.2800’s
USD/CAD 1.3100’s
EUR/USD 1.1017
USD/JPY 1.0900’s
USD/CHF 0.9900’s
AUD/USD 0.6800’s
NZD/USD 0.6300’s

Most important to NZD, the RBNZ is the first central bank to report interest rates and NZD rates are derived and factored based on the Fed’s crucial interest rate release every trading afternoon. The RBNZ sets the standard for all interest rates across Asia and Europe until its time again for the fed to release rates on a 24 hour cycle for the next trade day.

Since the last RBNZ meeting September 29 against the OCR cut to 1.0 in August, New Zealand real GDP for June, March and last December sustained 2.4, 2.7 and 2.8 December and remains higher Vs CAD at 1.6%, EUR 1.2%, AUD at 1.9, JPY at 0.6 and GBP at 1.4.

New Zealand however remains just below USD at 2.6, 2.9 and 2.9 from June to December.

Since June 2015 to present, New Zealand GDP began 2015 at 4.0 and now resides at a healthy 2.4. The August cut as stated from the September statement is expected to sustain GDP at current high levels.

As the September GDP states, the New Zealand economy reached $300 billion for the first time in its history with + 0.7% in Services leading the way from +0.3% in March. Manufacturing and Goods producing industries fell 0.2% in June followed by a 1.9% increase in March.

Inflation at 1.5% is perfectly in line to the 1%-3% target range. Contributing and vital factors to CPI are Oil and Housing.

Housing for New Zealand is common to most nations as Rents are rising faster than Purchase Prices and this phenomenon must attribute to house supply. House Prices rose annually at 2.8% broken down by 1.5% for Wellington, 0.6% for Aukland and 0.2% for Canterbury.

Rental Prices however also rose annually +2.9% and +0.9% in Wellington. Rental Prices for New Zealand is vital due to its 9.2% composition to CPI.

New dwellings rose 7.2% on a seasonally adjusted basis from August 2019 but stand alone houses fell seasonally adjusted at 4.8%. For September, 3,347 consent to build were issued and standalone houses at 1744 competed against 816 Town homes, Flats and Units Vs 611 Apartments and 176 retirement units. Stand Alone Houses at 1744 competes to 1603 for other categories.

The downside to CPI is Oil at minus 0.8% in September and minus 2.9% annually. Oil for New Zealand factors to a higher contribution than previous yearly assessments at 0.2% per quarter.

Since September’s last meeting NZD/USD monthly averages remain at 0.6300’s for October and September while the RBNZ’s TWI also remained stable at 70.53 for October and 70.78 in September.

The 90 day Interest Rate at current 1.15 dropped from monthly average 1.05 in October and remained at 1.15 for September. No change. Not only is 1.15 stable but it fails to meet the traditional 5 day rule for an RBNZ interest adjustment.

Further, 90 Day Futures traded on the Australia ASX Exchange, closed for Dec 2019, March 2020 and June at 98.93, 98.99 and 98.99. No movement nor a message to cut OCR.

Overall New Zealand’s economy, exchange rate and financial system remains quite stable. If the RBNZ assessed an interest rate drop based on exchange rates such as Norges Bank in Noway, then again no reason to move.

The only related factor to lower OCR is the RBA at 0.75 and 1.00 for the RBNZ. AUD as middle exchange rate positioned above NZD traditionally incorporates an interest rate above NZD. This situation will require adjustment as either NZD lowers or AUD rises.

Cut or nor cut, NZD for the week is fully covered.

NZD/USD longer term target is located at 0.6788.

Strategy. Long 0.6315 and 0.6306 if seen to target 0.6398. Must cross 0.6342 and 0.6383.
Long above 0.6414 to target 0.6540. Must cross 0.6451 and 0.6486 and 0.6522.
Short 0.6522 and 0.6558 if seen to target 0.6450. Must cross 0.6486.

NZD/JPY. Longer term Target 72.12.

Strategy. Long 68.85 and 68.62 if seen to target 69.43. Must cross 69.08 and 69.31.
Long above 69.56 to target 70.95. Must cross 69.79, 70.02, 70.49 and 70.72.

NZD/CHF. longer term Target 0.6729.

Strategy. Long 0.6303 and 0.6293 if seen to target 0.6342. Must cross 0.6323 and 0.6331.
Long above 0.6364 to target 0.6481. Must cross 0.6383, 0.6402, 0.6421, 0.6440 and 0.6459

NZD/CAD.
Long 0.8346 and 0.8316 to target 0.8439. Must cross 0.8376, 0.8405 and 0.8435.
Long above 0.8469 to target 0.8530. Must cross 0.8498.

EUR/NZD.

Strategy. Short 1.7445 and 1.7478 if seen to target 1.7346. Must cross 1.7412, 1.7445, and 1.7380.
Short below 1.7313 to target 1.7247. Must cross 1.7280.

GBP/NZD.. Longer term target 1.9900’s.

Strategy. Short 2.0212 and 2.0258 if seen to target 2.0074. Must cross 2.0120,.

 

Brian Twomey

Fed Odds: Math

Credit Monday Morning Macro

FFQ9: “no cut” = 97.86871 & “25bp cut tmrw” = 98.05419, we can work out what mkt px 97.885 implies. That is: 97.885 = 98.05419 * X + 97.86871 * (1 – X), where X = prob% of a cut tmrw. Apply a little grade-school math: X = 8.78%.

 

At its most extreme this morning, I’d estimate the mkt was pricing in almost 10% probability of a 25bp cut by the Fed tomorrow. How do I figure? It’s based on FFQ9 (August Fed Funds futures).

WARNING: This will involve some basic math.

FFQ9 is the 30-day August Federal Funds futures contract. It’s priced as a simple average of Daily Effective Federal Funds Rate (hereafter “EFFR”) for each day of the month. That rate is published in arrears (i.e. what’s published today is yesterday’s rate) on a daily basis at 9:00am EST by the New York Fed. It’s currently 2.13% (3bps over IOER).

IMPORTANT NOTE: There’s an extremely large number of realistic possible outcomes, including those where IOER continues to drift lower. There are reasons relating to the plumbing of the money markets that make this unlikely, but it’s a possibility. I’m only addressing the one which is most pressing: the market-implied probability of an emergency Fed ease. 

Here’s a table showing how this daily calculation works with 3 different scenarios which I’ll discuss in more detail below. 

No color = days we already know, Orange = future days (we don’t know today’s rate yet), Red = assumes the Fed cuts

EFFR has been trading anywhere from flat vs IOER to 5bps over for the better part of the last 6 months. When the Fed cut rates on July 31, EFFR went down by 26bps – from 2.40% to 2.14%. It stayed at 2.14% for the first two business days of the month, then went to 2.13%.

Because EFFR stayed at 2.14% on Friday August 2nd, that means according to the calculation methodology that the first 4 days of the month (i.e. the non-business days of Sat & Sun) also get counted as 2.14%. Therefore, assuming the Fed doesn’t do anything the rest of the month, the fair value of FFQ9 would be calculated as the simple average of 4 days at 2.14% and 27 days at 2.13%. Therefore price = 100 – rate = 97.86871.

But FFQ9 traded at 97.885 this morning! So what gives?

Clearly the mkt is pricing in some probability of EFFR being much lower that 2.13% at some point this month. But when? Emergency eases are just that: “emergencies”. They’re not telegraphed ahead of time or scheduled. So, we can only calculate probabilities by making an assumption about the day of the cut. 

Let’s take an example. Say the Fed cuts by 25bps on the last Thursday of the month (8/29), for whatever reason. EFFR only falls on the day AFTER a Fed cut (it wouldn’t take effect the same day), so we’d have two days of 2.13% – 25bps = 1.88% (8/30 & 8/31). Under that scenario FFQ9 = 97.88484. Close to current market pricing. But that’s assuming a 100% probability of a cut on 8/29. Markets don’t work in 0% or 100% probabilities. It’s frequently something in between. So then, what’s the probability of the Fed cutting 25bps TOMORROW?

If the Fed cut 25bps tomorrow, that would mean we’d have 4 days of 2.14%, 4 days of 2.13% (both today – which we don’t know yet – and tmrw would be 2.13% along with Monday & Tuesday’s rates), and 23 days of 1.88%. That price works out to 98.05419. Given that, we can work out what the probability assigned to this outcome should be.

If “no cut” = 97.86871 and “25bp cut tmrw” = 98.05419, we can work out what a market price of 97.885 implies. That is:

97.885 = 98.05419 * X + 97.86871 * (1 – X), where X = probability of a cut tmrw.

By applying a little elementary algebra, X = 8.78% or ~9%. 

Now, clearly, there’s a lot at work here. The market has to price in all possible paths of cuts which could theoretically take place on any day (including a weekend, in theory, which would cause EFFR to take effect at the lower rate on the following Monday). As I’m writing this, FFQ9 has ticked back lower, suggesting that the market is assigning less probability to a forthcoming emergency ease. But it’s clearly a fluid situation. SPX another -5% might alter the entire calculus.

Also, EFFR could drift lower relative to IOER. I would emphasize “could”. We “could” also drift higher. The odds of those events are roughly offsetting, to be conservative. We spent the last month trading closer to 5bps over IOER (which, if applied to the scenario for the rest of this month, would imply an even higher mkt-implied probability for emergency Fed action). 

 

Brian Twomey

FED Rates: Odss Priced

Credit to Monday Morning Macro

For those looking for a more detailed way of thinking about “odds”, a brief practitioners’ guide below. 

First, the September “odds”. The simplistic way to think about the pricing of odds for Fed cuts at upcoming meetings is to look at how many basis points lower that rate is versus the current spot rate. Right now, here’s what those rates look like vs the 1-month “spot” rate.

What’s currently priced into each of the mtgs this year.

In other words, the September FOMC is pricing in a total of 34.5bps, the October meeting is pricing in just over 2 “cuts” between now & then, and the December meeting is priced for just under 3 “cuts”.

What’s crucially important is this: just because the September FOMC has 34.5bps priced in, that doesn’t mean that there’s a 62% chance of a 25bps cut & a 38% chance of a 50bps cut.

If that were true, then that would mean you’d need to think there was 0% chance of the Fed staying on hold (it’s low, to be sure, but nothing’s 0% until it’s realized) *and* more importantly 0% chance of the Fed cutting by any more than 50bps. Clearly, that can’t be the case either. The Fed has routinely cut by more than 50bps in a crisis (the GFC, for example) and they will again. There’s a better way of doing this, and it involves using the options market.

Using current Fed Funds curves & fwd FRA/OIS, we can fit all possible Fed “paths” between now & the end of this year to current mkt pricing of the Eurodollar & OTC swaption mkt. The resulting probability distribution returns a shape of the fwd OIS curve for each meeting.

 

Brian Twomey

 

Fed Rates, CME Tool, Term Premium

Credit to Monday Morning Macro

One brief note on methodology: the CME “FedTool” has a similar probability tree but it calculates the odds using binary Markov chains. In a nutshell, this means that they only allow for 1 of 2 outcomes to be altered at a given meeting. If you think the Fed could either stay on hold, cut by 25, cut by 50, or more (which the options market is telling us is a possibility – why else would somebody be wanting to pay anything at all for something like the EDU9 98.50 calls?), then a binary chained decision tree isn’t correct. Look closely at the CME tool, they show zero probability for an “on hold” result. Even in this cynical world of second guessing policymakers, we should know that can’t be correct with more than a month still to go…

 

3. Funding

One of the aspects of the financial crisis that was so devastating to the credit market was the fact that funding spreads experienced a seizure unlike anything they’d seen previously. Steps were taken in the aftermath to buttress the industry against this happening again, but we still see periodic flare-ups in funding markets that often precede meaningful volatility in other asset classes. The most popular measure of this to follow is the spread between bank borrowing rates (representing unsecured credit) & the overnight Fed rate (representing secured credit): LIBOR vs OIS, also referred to as FRA/OIS (FRA = forward rate agreement). When this spread widens, it indicates funding stress is present. The Dec 19 future associated with this spread is now at its widest levels since early February 2018.

 

The Federal Reserve tracks what’s called “Term Premium”. The best way to understand this is as a measure of what compensation you’re receiving (once you strip out all the effects of inflation & some other econometric factors) for owning Treasuries. This seems like a sensible measure to watch: if you’re getting 1.625% in interest for 10-year bonds, but the inflation rate is the same – then it’s not really all that much compensation you’re earning in the end.

Currently, we’re at -1.21%. That’s easily the lowest since the Fed started tracking this in 1960.

 

Brian Twomey

Z SCORE Book Reviews

 

Review

Ricardo Dacosta

September 20, 2019

Format: PaperbackVerified Purchase

GBP: Levels, Ranges and Targets

The BOE’s main overnight rate Sonia , has not only experienced a reorganization since 2016 and in line with the ECB’s transition to negtive interet rates but the new order of the day for all central banks is not only to follow the ECB but all central banks are in transition to offer risk free interest rates. Best method to define a risk free interest rate is 1. to replace Libor and 2. A short term market trade able rate to trade alongside each central bank’s overnight rates.

The FED introduced SOFR and the ECB since October 2 offered STR, the Short Term Rate. Each central bank employs its interest rates according to its own market systems however not much real changes exists especially when interest rates are compared from central bank to central bank. The purpose is to not allow a central bank to gain exchange rate advantage from its competitor central banks.

An additional interest rate such as SOFR applied to DXY adds to a slower price speed and longer times in trading ranges and without breakouts. Today’s central bank meetings against an interest rate change or not only offers barely a 100 pip move and not necessarily in one direction. WTI as appled to USD interest rates moved 2 points in 4 months, from 55.00 to 57. As Central banks such as the BOE perfect new interest rate arrangements, all market prices will begin another slowdown to price speeds and market prices applies to commodities as well as stock markets. I warned to this affect long ago.

Today’s SOFR for example is 1.58 Vs Fed Funds 1.56 V Repo rate at 1.55. SOFR added to the mix employs as additional support or resistance point to exchange rate movements and hinders price breaks and price speeds.

The BOE’s Sonia stands at 0.71. From August 2018 -Nov 2019, Sonia ranged from 0.70 -0.71 and no movement. From 2014 to 2019, Sonia experienced 3 big moves: August 2016, Nov 2017 and August 2018. Sonia AUG 2016 traded from 0.45 -0.20 then November 2017 traded from 0.21 – 0.45. And November 2017 from 0.45 to 70, 0.71 where it remained to present day.

GBP/USD to target lower prices to 1.2600’s, then 1.2703 must break. Higher to target today’s 1.2912 must break 1.2879 and 1.2885. Long term, GBP/USD Targets 1.3300’s.

GBP/CHF at current 1.2700’s Vs GBP/USD at 1.2800’s holds solid supports at today’s 1.2482. GBP/CHF must trade lower in order for a drop to GBP/USD. Current GBP/CHF is overbought and heading lower. Long term target 1.2900′ and very close.

GBP/JPY. To move higher, Weekly 141.31 and 131.76 must break to target long term 143.00’s. Today;s lower target at 138.99 must break 139.42 and 139.24. At 140.29 and 140.38 should hold the ipside targets. GBP/JPY weeklies coincides to EUR/JPY to move higher at 123.85 and 124.94.

GBP/CAD Nothing exciting about GBP/CAD however 1.6881 downside Vs 1.6925 and 1.6936 to move higher to target 1.7077.

GBP/NZD Looking for a greater move back to 1.9900’s.

GBP/AUD is held solid at 1.8504 and a break targets 1.8378 while higher targets 1.8882.

18 Currency Pairs: Long Term Averages and Forecasts

The commonality to Currency markets and among the 18 pairs we trade weekly is long term targets are within 300 pips which means if achieves not only price alignments but neutral currency prices as new trading ranges are firmly established. A settled Price substitutes for neutrality as a settled Price lacks significant movement ability.

AUD pairs as AUD/USD, AUD/JPY and AUD/CHF however are holdouts to the 300 target number as AUD/USD and AUD/CHF targets stand at 400 pips and AUD/JPY 500. AUD/CHF shares the same commonality to NZD/CHF at 400 pips. GBP/JPY is next in line from AUD/JPY at 400 pips while CAD/JPY and GBP/CHF reside as lows to 200 pip targets. Remainder pairs reside at 300 pips however exclusions exist.

GBP/AUD sits within a wide 1.7500 to 1.9400 range and at 1.8700’s is under no threat to break anytime soon. EUR/NZD and GBP/NZD while not fully factored yet stand at traditional wide ranges and also under no threat as well to break anytime soon.

The second Currency Market commonality is a vast majority of the 24 currency pairs trade below or just above 5 year averages. USD/CAD at 1.2992 trades above while EUR/AUD and EUR/GBP trade above 5, 10 and 15 year averages. EUR/CHF threatens its 5 year average at 1.1108, EUR/USD at 1.1334, GBP/JPY at 148.05, EUR/JPY 123.00, GBP/CAD 1.7037.

For most currency pairs, trade below 5 year averages also means trade below 5, 10 and 15 year averages. What trade below averages 5 -15 means is continued compressed ranges and a price in dire need to rise in order to travel to higher ranges for increased volatility.

Currency Pair exceptions exists to the 5 -15 normal trade ranges. GBP/CAD as a wide range yet traditionally neutral currency pair and normally trades between its 5 and 15 year average to signify neutrality but the 10 year at 1.7037 crossed below the 5 year at 1.7714. EUR/JPY 10 year at 123.49 crossed below the 5 year at 127.00. GBP/JPY 10 year at 148.05 crossed below the 5 year at 154.00.

GBPCAD now trades below 5, 10 and 15 year averages while EUR/JPY and GBP/JPY trade below 5, 10 and 15 year averages.
EUR/CAD Neutrality trades between its proper arrangement at 14 to 5 year averages from 1.4461 and 1.4713. USD/CHF above the 5 year at 0.9804 will trade between its 5 and 15 year average at 1,0205. USD/JPY trades neutral from the 14 year average at 103.16 to 5 year at 112.55. GBP/AUD trades neutral from its 14 average at 1.8897 to 5 year at 1.8315.

14 Vs 10 Year averages

If ever a breakout warning existed, its those Currency pairs trading between the 10 and 14 year averages and many fit this order. GBP/NZD’s 14 year at 2.1884 Vs the 10 year at 1.9892. EUR/NZD 1.7623 at the 15 average Vs the 10 year at 1.6637. NZD/CAD 14 year at 0.8283 Vs the 10 year at 0.8588.

10 V 5 Year averages

CHF/JPY trades between its 10 year at 104.88 and 5 year at 114.86. AUD/NZD trades between its 5 year at 107.25 and 10 year at 1.1619.

EUR/GBP trades above its 5, 10 and 16 year averages at 0.8383 while EUR/AUD also trades above its 5, 10 and 15 averages.

USD/CAD trades above all averages and nearest is 1.2992 to then trade between the 5 and 10 averages from 1.2992 to 1.1634. Remainder currency pairs trade below 5, 10 and 15 year averages how neutral prices beckons.

Heading to Neutrality

EUR/USD on a break of 1.1334 would trade between its 5 and 10 year averages at 1.2369. EUR/CHF on a break of its 6 year average at 1.1107 then would trade from its 5 and 0 year average at 1.1868. CAD/CHF on a break of its 5 year average at 0.7553 would trade from 0.7553 to 10 year at 0.8374.

Long term Targets

Long term targets doesn’t necessarily mean today but it offers direction and trade strategy.

USD/CAD 1.2886 or 300 pips however the 5 year at 1.2992 must break.

CAD/JPY 84.56 from 92.00’s and 300 pips.

GBP/CAD 1.6881 then 10 year at 1.7037.

GBP/CHF 1.2912 then 5 year at 1.3373.

EUR/USD 1.1477 but 5 year at 1.1334.

GBP/USD 1.3380 then 5 year at 1.3632

GBP/JPY 143.76 then 10 year at 148.05

EUR/JPY 123.61 caution 10 year at 123.58

EUR/AUD 1.5771 then 14 and 5 year at 1.5229 and 1.5212.

GBP/AUD No target, range currency pair

NZD/USD 0.6788 then 5 year at 0.6959

NZD/JPY 72.12 then 10 and 14 year at 74.57 and 74.59

NZD/CHF 0.6729 then 5 year at 0.6819

AUD/USD 0.7392 then 5 year at 0.7461

AUD/JPY 79.86 then 5 year at 84.01

AUD/CHF 0.7295 then 5 year at 0.7311.

Trade strategy overall constitutes either targets achieve fairly soon and a massive neutrality exists in currency markets or the magic number from 300 drops to a 600 pip target.

GBP/NZD and EUR/NZD targets updates today however both are extraordinarily wide range currency pairs and a formal target is never expected.

Best and easiest trade among all 18 Currency pairs is EUR/AUD as was the sell rally case for all EUR/AUD posts within the past 18 months.

 

Brian Twomey

USD/CAD, GBP/JPY, EUR/JPY, AUD/JPY, NZD/JPY, CAD/JPY

Weekly Trades for BOJ and BOC, Entries and targets offered.

 

 

Notice USD/CAD and CAD/JPY contain 3 Trades per pair. Just click click all week and life will be just fine.

 

No stops, charts, graphs, no baloney just simple and perfect Trading.

 

USDCAD. Break Point 1.3203, below targets 1.2998 and 1.2930.

Strategy. Long 1.3032 and 1.2998 if seen to target 1.3185. Must cross 1.3066, 1.3134, 1.3140 and 1.3163.

Long above 1.3203 to target 1.3304. Must cross 1.3236 and 1.3270. Short 1.3304 to target 1.3270. Short Only Strategy.

 

CADJPY. Break Point 81.99, below targets 81.39 and 80.79.

Strategy. Short 83.17 and 83.46 if seen to target 82.28. Must cross 83.17 and 82.58. Short below 81.99 to target 80.79. Must cross 81.39. Long 80.79 to target 81.69. Must cross 81.39. Long only strategy.

 

EURJPY. Break Point 120.23, below targets 119.18.

 

Strategy. Short 120.74 and 120.99 if seen to target 120.35. Short below 120.23 to target 119.18. Must cross 120.10, 119.97 and 119.71. Long only strategy.

 

AUDJPY. Break Point 74.11, above targets 74.93.

 

Strategy. Long 73.69 and 73.48 if seen to target 74.05. Must cross 73.90.

Long above 74.11 to target 74.93. Must cross 74.31 and 74.52. Long only Strategy.

 

NZDJPY. Break Point 69.51, above targets 70.07 and 70.63.

 

Strategy. Long 68.36 and 68.07 if seen to target 69.36. Must cross 68.50, 68.64 and 68.92.

Long above 69.51 to target 70.07. Must cross 69.79. Long only strategy

 

GBPPY. Break Point 136.88, below targets 135.66.

 

Strategy. Short 139.91 and 140.52 if seen to target 137.17. Must cross 139.01, 138.70, 138.09 and 137.48. Long only strategy.

 

 

 

Brian Twomey  Contact for trades  brian@btwomey.com

 

 

Trade Methodologies

Welcome You Tube. I have a You Tube channel but my computer skills don’t currently allow the channel to operate, yet. This explains why I’m found only on twitter @authorbtwomey and Linked In. It also explains why I don’t use nor post charts and graph. All trades for many, many years are hand calculated as I threw away charts over 10 years ago. As I explain to new people, whatever you think you know or thought you knew about trading and forex, leave it at the door when entering my trades and methods. I’m 16 years trading and posted articles since 2007. Yet I don’t get around much but well known around the world.

I’m not a trade service but willing to assist traders to earn from trading.

 

Here basic Trade Methods

EURUSD The Trades defined

 

Daytrades Generally Targets 50 -90 Pips one direction, depends on Currency pair Ex GBPCAD 90ish, EURAUD 70ish

Always 2 way Trades available, may double the 50 and 90.

Weekly trade targets 150 -250 pips per Currency

Long term Trades  500 -1000. For example, I have a trader long GBP/USD at 1.1900’s and GBP now trades 1.2900’s. He held this trade for 6 months and never looked back. Most longer term trades are 4 and 700 pips and about a 1 month trade duration. 

Traders know and trust me for many years to be most accurate and earn profits and  its why I maintain multi year friendships and Trade relations.

 

Brian Twomey

 

Brian Twomey Weekly Trades Track Record

Here 5 Month per week Track record on 12 currency pairs, we are now trading 18 weekly currency pairs, All posted here on my blog

Given weekly are entries, targets and the main price points to achieve targets, We trade numbers so don’t use charts, graphs nor stops nor concerned with latest market talk blah blah. We are traders and we profit nicely but not addicted to daily market talk as it contains no bearing to a price target. We don’t even watch screens as trades are meant to enter and trade without constant check. Many trades are busy in life and don’t have time to constant monitor and that’s what my trades are designed for. This is 16 years n the making to achieve such perfection

 

 

 

Here’s the record on 12 weekly Currency Pairs for 5 months   https://twbrian.wordpress.com/2019/07/12/fx-trade-results-feb-22-july-12/

 

Math behind weekly trades https://twbrian.wordpress.com/2019/06/28/fxtrade-results-feb-22-june-28/

USD/ZAR, EUR/ZAR, GBP/USD, GBP/JPY Weekly Trades

USDZAR 59 Year Average High 16.3527, traded Jan 2010, Closed 14.7905 Traded January 2010 16.3527 highs Vs Lows 15.5596
USDZAR 59 Year uptrend since January 1960 at start 0.7142
USDZAR close Price 14.7905
EURZAR Close Price 16.5225, 59 Year EURZAR High January 2016 was 17.7579 January 1960 was 0.6799
EURZAR and USDZAR Both in 59 year Competition for new Highs.
USDZAR is clearly the driver as EURZAR contains range problems
USDZAR Trades below its respective average at 14.8119 while EURZAR trades above its average at 16.4079
USD/ZAR Break Point 14.8119, below targets 14.7168 and 14.6216, Above targets 14.9070 and 15.002, longer term 13.5736
Strategy. Long 14.7405 and 14.7168 if seen to target 14.8001.
Long above 14.8119 to target 15.0022. Must cross 14.8237, 14.8356, 14.8594 and 14.9070,
EUR/ZAR Break Point 16.4079, below targets 16.3933, 16.3787, 16.3495 and 16.2910, above targets 16.4225, 16.4371, 16.4663 and 16.6248 Longest term target 15.5319 Strategy. Short 16.5394 and 16.5540 if seen to target 16.4663, 16.4371 then 16.4225.
  USD/ZAR Trade results 908 Pips   EUR/ZAR 1000 Pips
My specialty for the past 10 years is achieve perfect Trade Targets and entries
Many Trades were demonstrated in this post over past months,
EURAUD for example +700 pips and target achieved as forecast. CHFJPY +500 perfect Target,. GBPJPY 1000 pips.
The list is long and verification is located on my blog.
I don’t use charts, graphs, stops nor am I concerned with daily Market banter as its effects on price is minimal to non existent.
Trades are 150 pips and above or I don’t bother. Not sure intro is needed as my writings date to 2007 and I’m well known throughout the world.
My Trades are unmatched by anybody. Here’s weekly GBPUSD and GBPJPY and 2 of 18 Currency Trades this week.
Why 18 Pairs is for Traders in my service.
GBP/USD. Break Point 1.2531, below targets 1.2463 and 1.2393.
Strategy. Short 1.2975 and 1.3009 if seen to target 1.2551. Must cross 1.2941, 1.2804, 1.2735 and 1.2667.
Short below 1.2431 to target 1.2463 and 1.2393. Long only strategy.
GBP/JPY. Break Point 135.49, below targets 134.42 and 133.34.
Strategy. Short 140.80 and 141.33 if seen to target 136.55. Must cross 139.74, 138.67, 138.14 and 137.61. Short below 135.49 to target 134.42 and 133.34.
             GBP/USD Runs so far 221 Pips while GBP/JPY runs 246 for a total 467 Pips
                    Brian Twomey

Martin Luther

 

“Avoid those who search for your soul in a moneybag. For when they find a penny in the purse, it is dearer to them than any soul whatsoever.” That’s from Martin Luther in 1517. He was in a mood about rich people trying to buy their way into heaven.

BOJ Yield Control and Formula

BOJ’s yield curve control could ignite bubbles

Bank bucks global trend by maintaining long-term rates at zero

The Bank of Japan’s headquarters in Tokyo

TOKYO — While the U.S. Federal Reserve’s rate hikes put upward pressure on long-term interest rates around the world, Japan is going against the trend as the Bank of Japan tries to maintain long-term interest rates at nearly zero.

“I wish I could say that the BOJ adopted a new policy in September in anticipation of Donald Trump’s victory,” said a BOJ executive. He seemed pleased with the outcome of the bank’s yield curve control.

Takashi Kamiya, chief economist at T&D Asset Management, said theoretical 10-year Japanese government bond yields would have been around 0.5% if the BOJ had not adopted the yield curve control.

Theoretical yields are based on 10-year U.S. Treasury yields and Japanese and U.S. policy rates. Japan’s theoretical long-term interest rates will rise along with the rise in U.S. long-term interest rates and the widening of the spread between long- and short-term rates.

Theoretical 10-year JGB yields are obtained by the following formula: (0.59 x 10-year U.S. Treasury yields) minus (0.11 x U.S. federal funds rate) plus (0.63 x Japan’s policy rate) minus 0.89.

This formula predicted how actual JGB yields would move, until the BOJ launched the yield curve control in September. The spread between theoretical and actual yields started to widen.

The graph shows that actual government bond yields have remained at around zero despite the fact that theoretical 10-year JGB yields are rising along with the uptick in U.S. Treasury yields.

Upward pressure

The BOJ’s monetary policy becomes more accommodative as the spread between theoretical and actual yields widens. The broader the gap between Japanese and U.S. long-term interest rates gets, the more likely the yen will weaken against the dollar. The BOJ’s monetary easing and the weaker yen have also buoyed Japanese stocks.

The situation in Japan is in stark contrast with China. Unlike in Japan, yields on Chinese government bonds are rising sharply along with those on U.S. Treasurys. The People’s Bank of China, the central bank, does not use yield curve controls, but that is not the sole cause of the rise in the Chinese bond yields.

With private capital flowing out of China, Beijing has no choice but to meet rising demand for foreign currencies by digging into its foreign reserves. Since foreign reserves are held by the PBOC, this means the bank is tightening its monetary policy unintentionally.

If this continues, China will likely be hit by a decline in bond and stock prices as well as a weakening yuan, and this will affect the U.S. and Japan as well. U.S. authorities are likely to strengthen their expectations for Japanese investors’ buying, as China’s purchases of U.S. Treasurys can no longer be expected.

Translating it into monetary policy, the BOJ’s yield curve control is expected to be used as an anchor to stabilize U.S. Treasurys.

That reminds us of the so-called “anchor theory,” which emerged after the global stock market chaos, known as Black Monday, in 1987. The BOJ’s policy to keep interest rates low was later criticized for leading to the expansion of the subsequent bubble economy.

The BOJ’s monetary policy is likely to become even more accommodative, as it will take some more time for the bank to achieve its 2% inflation target. Stock and currency market participants may see signs of bubbles forming, but may not want to miss out on opportunities that present themselves.

SPX500 V VIX

Few words thrown together regards to VIX and SPX500

July top by calculations reported 2855 now 3 months later the new top is 2955.71. SPX averages gained 100 points in 3 months.

SPX for 3 months traveled along its top. and without a meaningful correction. Inside SPX current price is pure noise and it deserves desperately a correction. Current prices are mid range to overbought.

Trade strategy as in July is short only until a correction to at least 2600’s trade. Impossible to long a price at its top.

Vital averages 2818.74, 2775.14, 2634.81, 2625.83, 2495.06 and 2405.44.

Trade targets 2955.71, 2904.21, 2869.13, 2813.70, 2742.65, 2681.77, 2646.07

 

VIX

The VIX is a true safe haven asset exactly as  Gold and Silver. SPX is a risk asset while VIX safe haven status trades prices direct opposite to SPX. The ViX correlation currently runs positive 12% and +31% then correlations begin to run higher positives along higher averages. VIX contains an off sync alignment problem to SPX and its related to the SPX top. The higher SPX travels then the more dysfunctional becomes VIX.

Proper VIX status as a correct trade instrument is negative correlations to SPX. A higher VIX means lower SPX while lower VIX translates to higher SPX.

Current averages 17.16, 16.17, 15.65, 15.41, 14.91 and 14.60

Trade Targets 20.31, 19.59, 19.31, 19.59, 18.37, 18.25, 16.57. Trade targets reveal 17.16 holds.

Further VIX explanation to SPX misalignment is VIX best range is 4 points. The lost component to VIX relationship to SPX experienced compression to its averages and therefore lost ranges.

 

Brian Twomey

 

EUR/SEK, EUR/NOK, USD/CAD, CAD/JPY, USD/PLN, EUR/USD

A trade target in any financial instrument represents a point of alignment to a distribution, an average. A target is a settled price, a comfort point, a location that must achieve its destination by mathematical standards. A price lacks any other choice except to align and reach its price target.

W trade on the assumption the market is correct when in reality, the market is always wrong and this is what allows for off kilter prices to trade to a target. If the market was always correct, trading wouldn’t exist. The key is to know which market price, currency pair or what financial instrument offers the best trade profit.

A settled price or price inside a specific comfort zone lacks a meaningful trade because its price is correct. A correct market price must allow time to travel to its off sync destination before a trade is worthy. This takes time especially in today’s non volatile markets. The key is to find the most non correct price in order to trade an easy price target.

A trader married to a particular currency pair or financial instrument must view prices as off base to alignment then off base back to alignment. If an off sync price achieves alignment then naturally it must travel to off kilter again. This means for example , long and short is identified by long alignment and short off kilter.

USD/CAD and CAD/JPY offer such multiple trades this week

For the week, here’s a few trades

EUR/USD watch break 1.1054 then 1.1160, 1.1266 and a massive brick wall at 1.1307 and 1.1337.

EUR/SEK

For the week, big line break 10.6975, below targets 10.6670 and 10.6362. Long term target 10.1092

Strategy. Short 10.8083 and 10.8142, to target 10.7588. Must cross 10.8083, 10.8007, 10.7854. Short only strategy.
Short entry just before 10.8201.

EUR/NOK

Break Point 9.8854, below targets 9.8472 and 9.8090. Longer term target 9.4172.

Strategy. Short 9.9904 and 10.0000 to target 9.9618. Must cross 9.9809, 9.9713 and 9.9663. Short only strategy.

Shorts just before 10.0382

USDCAD. Break Point 1.3267, below targets 1.3186, 1.3161 and 1.3149

Strategy. Short 1.3321 and 1.3348 if seen to target 1.3270. Must cross 1.3294. Short below 1.3267 to target 1.3186. Must cross 1.3240 and 1.3213. Long 1.3186 to target 1.3253. Must cross 1.3213 and 1.3240. Short only strategy.

CADJPY. Break Point 81.29, above targets 81.76, 82.15 and 82.58.

Strategy. Long 80.41 and 80.20 if seen to target 81.20. Must cross 80.41, 80.85 and 81.02. Long above 81.29 to target 82.36. Must cross 81.72 and 82.15. Short 82.36 to target 81.50. Must cross 82.15 and 8172. Long only strategy.

USD/PLN

Break Point 3.9251, below targets 3.8943 and 3.8635. Longer term target 3.7381.

Strategy. Short 3.9559 and 3.9713 to target 3.9328. Must cross 3.9559, 3.9405. Short only strategy.

Shorts just before 3.9867. Watch break 3.9251 and take this short immediately.

Brian Twomey

Peter Wadkins EUR/USD close to over sold territory, fundamentals favour fading rallies

EUR/USD close to over sold territory, fundamentals favour fading rallies

Peter Wadkins

Status is online

Peter Wadkins

Founder at InvictusFX
4 articles 

At time of our original analysis (September 16th) EUR/USD closed at 1.1028, off 1.9% since April 5th. In historical context for that period, it was pretty tame (the third least volatile period since the inception of the Euro) and less than half the average 5.1% fluctuation for that period .

Reviewing the 20 summers since the Euro was launched it’s surprising that 9 out of 20 saw EUR/USD decline, surprising because tourist inflows have always bolstered the current accounts of legacy currency countries, particularly Italy, Spain and Greece. During our European sojourn it was patently obvious that tourism continues to be the mainstay of the Southern European economies.

The average of EUR/USD declines during the periods under review were 6.7% and the rallies 5.4%. Adjusted for outliers (highest and lowest) those fluctuations average 6.0% and 5.1% respectively. The 2019 spring/summer decline (referring to our selected dates – April 5 / September 16) of 1.9% was the smallest of any decline since the Euro was launched. The 1.1403/1.0926 Hi/Lo was a mere 4.4% fluctuation and reflects the generally subdued mood in major FX pairs during the summer of 2019. It should be noted however that the September low was the lowest EUR/USD has registered since May 2017, which hints at further downside probes.

Our fair value Bollinger Band / moving average model that monitors 15 components from the 24-Hr M/A to the 200 DMA updated yesterday, reveals EUR/USD is just 0.6% above the -2.5% blended model Bollinger Band midpoint. This is due to the longer term valuations being stretched. The upper band of the blended oversold model is located at 1.0971 and the lower band 1.0896,

The intermediate components would allow EUR/USD to dip to 1.0889 and the medium term components 1.0856. The lowest -3.0 Bollinger Band reading we use resides at 1.0828 (75-DMA).

The implication from all this is that EUR/USD at 1.0998 is about 1.6% above it’s lowest attainable level and starts becoming oversold as high as 1.0978, which is why it has struggled around to break significantly below 1.1000. 1.0860-1.0945 registers heavily oversold for various averages between the 24-HMA and the 200-DMA, consequently algos that incorporate similar types of value indicators will be reducing short positions as they near those parameters.

Bollinger Band Moving Average Mode

Short term M/As will be the first to get stretched, 1.0845 represents a -4.1% Bollinger band reading and whilst attainable (we pressed -4.5 on Sep 18 at 1.1013) would likely be short-lived and prompt profit-taking. The recent high was 1.1073 on Sep 19, so if we press as low as 1.0845 look to scale out of shorts and reload higher up.

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The beautiful feature of Bollinger Bands is they expand and contract with volatility, so as of today a -4.5 reading on the 24-HMA would be 1.0873. This feature helps you avoid scaling out too early from positions or, more importantly, entering a counter-trend trade too early if you’re a value seeker looking to catch the proverbial falling knife.

The recommended setting for Bollinger Bands is -2.0 BUT through trial and and with different instruments we’ve found it better to experiment with that. Over time I’ve found the 24-HMA setting should be higher, +/- 2.5 for overbought/ oversold and +/- 3.5 for overbought/ oversold however once you get out to 72-hrs it;s better to revert to +/- 2.0 and 3.0. For convenience sake you can look at the mid , 3.0 for short term and 2.5 for longer term BUT when markets are less volatile or the trends are muted you can miss trades by having your markers too high or low.

As an example, when we hit the 1.0926 low the 24-HMA Bollinger Band reading was just -2.2 which is why you have to also monitor the longer term readings. When we hit that low the 200-HMA Bollinger Band was at -2.6 and had broken through the -3.0 level about a day earlier – a warning signal that we were approaching heavily oversold levels. The 21-DMA Bollinger Band registered -2.6 at the 1.0926 low and as the bands contracted, registered a -2.9 reading 7 days later at 1.09265, which formed a double bottom, a second bite at the cherry and a clear warning a bounce was coming.

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Evidence that the EUR/USD market is in a state of flux can also be found on mixed candlestick formations over the past 3 weeks, a bullish firefly, followed by a bearish gravestone doji, a bullish engulfing candle, followed by a bearish hammer. Every one of those signals if followed would have netted a decent profit if acted upon and since then we’ve experienced sideways action with a negative bias.

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Technically, our moving average/ Bollinger Band model once more shifted maximum short which is its maximum short and is at its most vulnerable. Remember, oversold valuations start registering from 1.0978 to 1.0942 for the ultra short term M/As out to the medium term M/As, so trailing stops and oversold targets are probably the way to go.

FUNDAMENTALS

This section we compiled Friday after stocks flirted with the year’s highs, the Dow closed down 0.59%, the S&P closed down 0.49% and the Nasdaq 0.8% on triple-witching day. The Fed announced it will maintain its daily repo operations until October 10th, easing recent quarter end USD funding concerns but Fed Chair Powell’s post- FOMC comments still hang in the air, the Fed’s easing stance can no longer be taken for granted.

The shortage of reserves in the US banking system will hang over the market throughout Q4 into the New Year and will make overseas participants in US money markets wary of their balance sheet status. That should buoy short term US interest rates and underpin the US dollar, however looking at the DXY and the April 5 and September 16 2019 dates we reviewed in the Technicals part of this paper the DXY has only advanced 1.3%, which tells us that Euro weakness has also contributed to the single currency’s decline.

Despite the Fed clipping 0.25% off the Fed Funds target rate to this week (now 1.75-2.0%) vs the ECB moving rates 0.1% more negative (to -0.5%) EUR/USD has remained under pressure which seems more related to Fed Chair Powell’s enigmatic remarks as well as the obvious dichotomy between different camps on the FOMC.

Whilst most pundits expect the ECB to maintain rates at current levels for the next 12 months, Fed watchers are also split, whilst markets are still pricing in a roughly 45% chance of an October rate cut, it seems unlikely given the internal schism apparent after Wednesday’s press conference. The meeting’s minutes will be strongly scrutinized for more clues in 3 weeks time which should tell us how data dependent Fed policy is. Most market participants concur that the biggest risk on the horizon is that US economic data picks up and derails further interest rate cuts.

There’s widespread talk of a recession in Germany which was reflected in the last Ifo index on August 26 that was dismal. A recent Economist Magazine report attributed the economic slump to the export sector, primarily car exports that have slumped due to poor demand in China and the UK. Car production is off 17% this year according to the Economist which also notes a drop in demand for Germany’s predominantly diesel fueled motor vehicles.

The bigger issue with Germany is its massive current account surplus, in 2018 it was the world’s largest at USD 294 bln representing 7.4% of GDP, down from 2015’s 8.9% but still way above the European Commission’s upper bound of 6.0%. Given the EU area’s GDP surplus is a tad below 3% it’s patently obvious that Germany’s out-performance is robbing economic vibrancy from fellow EU members, particularly those currently in the Euro Zone.

In the past the less productive economies would devalue their currencies to offset Germany’s efficiency gains, without that ability Germany’s economy will continue to outpace fellow EU member countries and the economic imbalances will continue to compound. A more egregious current account surplus offender in percentage terms is the Netherlands at roughly 9% but due to Germany’s larger population, it is Germany’s current account surplus that draws the attention.

The US current account deficit last year was USD 488.5 bln or 2.4% of GDP, it’s unhealthy to continue to amass these sizable deficits which is why the US Administration is fighting to redress trade imbalances after decades of deterioration. Wealth transference between the G7 and the rest of the world has continued unabated for decades but it’s only the primary G7 C/A deficit nations that suffer at the margin.

Global central banks, still recovering from the Great Financial Crisis remain handcuffed in their ability to accelerate global growth the RBNZ held rates unchanged this week after no changes from the BoC, BoE, BoJ, RBA and the SNB. The 25bp rate cut by the Fed and further 0.1% increase in the ECB’s base rate paints a grim picture as to next steps. The pundits believe the negative US yield curve forecasts that a US recession is on the cards but US economic data does not support that theory.

Whilst the US ISM dipped into mildly negative territory (49.1) it was the August report and that’s when factories shut down and retool. Depending upon the vagaries of those developments (Did they extend the furlough? Did the dates straddle different weeks because of calendar effects? etc) it’s not a good month to base decisions on.

US industrial production was +0.6%, decent; retail sales +0.4%, OK; durable goods +2.1%, nice headline; housing starts +12.3%, outstanding; housing sales +1.3%, good; and house prices are up on the year. Add to that average hourly earnings are up 3.2% despite a softer set of NFP data than forecast, plus downward revisions and you have to say things are OK. not great but OK.

On balance it appears the Fed’s actions for once have been to head off potential headwinds to the economy. With unemployment at a historically low 3.7% it surprises me that we’ve had consecutive rate cuts but we have. Those cuts were insurance cuts, ’cause nobody wants a recession, you can always hike if the inflation rate accelerates but with negative interest rates in most of the developed world what’s going to ramp up inflation?

The biggest potential black swan event is likely to emanate from the continuing trade tariff discussions between the US and China (mainly) and the EU behind that, but these discussions are needed to redress negative trade conditions that have prevailed for decades, with China and Germany the largest global export rivals and both of their trade surpluses, the Administration will continue to fight the fight.

The fact of the matter is the US sucks in the most imports, in a tit-for-tat war on trade tariffs, the US has to win. Sure the US consumer may have to pay a little more for consumer goods but it could also have a positive impact domestically, US consumers may buy more American products as foreign price advantage is diminished by tariffs; but maybe they’ll decide at the higher price it’s not worth having. Either way the US capital accounts will eventually benefit.

For additional content please see InvictusFX.com

10 year yield V FX, Stocks, Commodities, DXY

The 10 year Treasury yield on September 3rd was 1.43, stalled September 8 -10th then resumed the uptrend to close at 1.899 on September 13. The yield rose 46 points.

Yield aside, the 10 year bond price September 3rd reached 99.00 dropped to September 13 at 97.6/ 32 as Treasuries are priced in 32nds as opposed to foreign bonds at 0.01.

To recap, 99.00 Bond price Vs 1.43 yield.

DXY September 3 – 13 dropped from 99.37 – 97.87 or 150 pips. The 10 year yield rose and DXY dropped. No such concept exists to 100 DXY. The bond price and DXY are at highest points while yields at bottoms.

Currencies Sept 3 -13

21 of 28 currencies rose and 7 currency pairs dropped as follows
EURAUD
EURGBP
USDCAD
GBPAUD
GBPNZD
EURNZD
EURCAD

Stock Markets, All risk assets rose as follows

FTSE DAX S&P, Nikkei, ASX SPTSX

The VIX was down

Bond Prices Sept 3 -13

JGB’s = Down Gilts = Down Bunds = Down Treasuries = Down

Commodities Sept 3 -13

WTI Up, yet Skitzy prices while Brent = Up. As an aside, WTI since January had a 5 Point range in every month since January. WTI lacks a serious Correlation to not only GDP but all USD financial assets.

Nat Gas UP

Gold Down deeply

Silver Down deeply

wheat UP
Copper UP

Soybeans UP

To define the 10 year Bond price

Bond price Current 97. 6/32

Maturity Aug 2029

Coupon Rate 1.62

Yield to Maturity 34.13% means price expected if held to 10 year maturity.

To understand 32nds

30 year Treasury yield is priced in 32nds and priced at $312.50 for each 32nd or $3,000 per point. One basis point on a 10 year bond is $1000.
A guide
From fraction to decimal,
1/32 = 0.0313,
3/64 = 0.0469,
1/16 = 0.0625,
5/64 = 0.0781.
At 63/64 = 0.9844 then comes 1.0 as a fully traded basis point.
From Fraction to percent,
1/32 = 3.125%
3/64 = 4.687%
1/16 = 6.25%
5/64 = 7.812
63/64 = 98.437%. Then 1.0 as a fully traded basis point.

What is safehaven and Safehaven assets and how is it defined Answer is any asset that is or follows a bond price because of the guaranteed obligation placed on bond payouts by governments. Gold and Silver past and present falls into safe assets.

DXY is safe while USD as general concept as USDJPY USDCHF USDCAD Fails definition. Yet USDCAD is a severe outlier Currency.

Yield curve maybe defined by actual yields but a true yield curve is interest rates because interest rates price yields and bonds. Actually, Yields and bonds are secondary financial instruments.

 

Brian Twomey

EONIA Switch to ESTR

ECB will begin elimination of Eonia and replaced with $STR. on October 2
Massive change is the 3:00 a.m EST publication time from Afternoon EST in New York afternoon.
No longer will Eonia compete against FED Funds Rate released at 4:15 EST daily and published just shortly after Eonia.
Now $STR becomes its own standing Interest rate and competes against itself and other European interest rates.
This move, years in the overall ECB plan, represents the ECB full break with Fed Funds.
More importantly, the new plan represents the ECB‘s full control over EUR and all European Financial instruments as is the Methodology for all nations. European interest rates now fully decide their own price of their financial instruments to include Euro. Previous in NY afternoons, Eonia competed with Fed Funds as traders had a choice to trade USD or Eonia.
Its a smart move for the ECB.
 The 3 am publication means $STR moves ahead of the BOE  Sonia so EUR becomes King Currency as the first trade Currency over GBP.
Overall Trade lineup from FED funds 4:15 EST. As follows
3 am means americans daytrades are forced to trade as we do starting at 2:30 am or the day trade profits will be lost.
New $STR means EUR may predict 24 hours ahead accurately as is the case for all currencies. Previously, Eonia released in NY afternoons had to compete with not only Fed Funds but the next day’s Euribor release. Eonia was to involved against other interest rates to predict 24 hours ahead with perfect accuracy.
 EUR movements should be better, more sound. Forward STR will be calculated based on OIS trade rates
  The ECB’s transition to STR means no changes to overall Interest rates. The idea to go more negative interest rates forces CHF, SEK, DKK and NOK to cut their own rates lower as all interest rates from respective nations are located below Europe. Now is not the time for the ECB to act while in transition.
      Brian Twomey