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Viewing entries tagged with 'US'

How high is the NZD - really?

Posted by Graham Parlane on 13 March 2014

All

I detect the sense from my client base that the overall feeling is that the NZD complex is high or even ‘overvalued’. In a historical sense it may seem that way but let me assure you the current levels are far from an impediment to the trading of NZ Inc. Best put, not all NZD/USD rates at 0.8500 are equal.

Indeed today the RBNZ said “the opportunities for FX intervention are low”. That’s because point no 1 in the intervention checklist is “is the currency overvalued?” It’s not.

NZ Inc. is enjoying a terms of trade situation that is the best in 40 years. That saying that our export receipts minus our import costs are the best net situation that they’ve been in 4 decades. The prices we receive for our exports have risen faster than the exchange rate. Since the NZD was at 0.8800 in Aug 2011 our dairy price returns have increased by about 46% !

NZ Inc. is experiencing the fastest net inward flow of people in 10 years. +30,000 last year.

NZ Inc. has consumer and business confidence at 20 year highs. These surveys are highly correlated with future growth outcomes.

NZ Inc. is experiencing a huge positive shock from the Canterbury rebuild.

Overall monetary conditions are not as restrictive to business as they’ve been in the past. When the NZD/USD was at 0.82 in 2008 the cash rate was 8.25%.

The U.S. Federal Reserve has stated that they do not see the need to raise interest rates until at least mid-2015. Looking at the RBNZ’s forecasts today, NZ will have made six 0.25% rate rises by then! Currencies are still mainly determined by the change in interest rate differentials above all else.

The NZD is not ‘high’. Far from it. There is no fundamental ‘ceiling’ to cap this thing anytime soon.

G.

BBY (NZ) Limited, a specialist advisor in Futures - FX - CFD - Options - Shares - Gold - Silver - Commodities

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BBY Investing is hiring Private Client Advisors

Posted on 8 October 2013

BBY are seeking experienced Private Client Advisors who have:

  • proven sales and business developments results
  • an existing or transferrable client base
  • appropriate qualification
  • sound knowledge of industry regulation and compliance underpinned by a strong ethical foundation

For full details, please click here to view the flyer.

If you match our ideal candidate profile, we would be very keen to hear from you.

BBY (NZ) Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities

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team Graham Parlane

Chart of interest - Gold

Posted by Graham Parlane on 23 August 2013

The decade long rally in Gold has been in a wide ‘flat bottom triangle’ consolidation for nigh on a year now. My main premise has been that the Gold market is sitting ‘long’ and that there would be very little oomph from any further Fed action. As such I have been looking for a potential shake out to the downside.

My view is in jeopardy as the precious metals have put in very good performances over the last few days. Recall Gold and Silver were amongst the biggest beneficiaries of the U.S.money printing programs previously.

Given developments the Gold charts are particularly interesting.

Fig 1) – 10 year Gold chart

10 year Gold chart – click here to view

Fig 2) – A closer look. US$1,660.00 looks a key level.

Closer look Gold chart – click here to view

Cheers G

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Chart of interest - USD/JPY

Posted by Graham Parlane on 28 May 2013

All

The USD/JPY has been consolidating its mammoth gains of recent months tracing out a ‘bull pennant’ between 96.00/100.00 over the last 4 weeks.

USDJPY – Click here to view chart

Friday’s jump higher on the U.S. payrolls data occurred perfectly out of my model.

USDJPY Model – Click here to view chart

The reason I believe USD/JPY is set to resume its uptrend after the month of sideways is, apart from Japan’s incredible monetary policy program, is that USD/JPY moves are highly correlated to U.S interest rate yields and as in my earlier chart of interest documenting the U.S. 10 year bond those yields look likely to go higher in coming weeks. Thus I believe we have a more fundamental support for USD/JPY again now.

Market talk has it that massive stop loss buy orders have accumulated above 100.00 so any move through there may well see an acceleration of the uptrend.

Regards G

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Chart of interest - USD Index (DXY)

Posted by Graham Parlane on 28 May 2013

All

How strong is the USD ? Is the strength likely to last?

These two questions obviously go to the heart of matters at the moment and if the answer can be found then we can potentially unlock great profits.

After years of being shunned it appears that the U.S. is once again a preferred destination of investment. Since the start of the century, and accelerated by the onset of the GFC, investment funds flew out of the U.S. and headed for emerging markets. Such was the magnitude of the drive to exit ‘old’ for ‘emerging’ that a new term was coined. The rise of the BRIC’s (Brazil, Russia, India and China) was on everyone’s radar ……largely at the expense of the U.S.

However the U.S. has always been an early mover and we must admire them for the significant policy responses that were implemented in the wake of the GFC (compared to say the Japanese after their stock market collapse in 1989 which even until today was never adequately dealt with). These actions appear to now be bearing fruit just at a time when the BRIC’s, particularly China are slowing a touch.

Thus the massive flow of funds from old to new now looks to be slowing or even reversing.

Looking at the DXY chart this theme is strongly borne out.

The monthly chart of the USD Index is particularly revealing. Firstly there appears to be a long term ‘rounding bottom’ formation of some 10 years in the making. And significantly we are on the cusp of 2 bullish engulfing months within the last 4. To me that speaks volumes to the amount of USD buying presently going on. If history generally repeats, then the implications of a close to the month for the USD at these levels, implies multiple months of further USD gains.

USD Index – Click here to view chart

The USD Index can be traded via the standard Futures contract or a CFD, both available on your BBY Online platforms. Or you may wish to simply spread USD risk through some of our old favourites in currency land, AUD, NZD, EUR, GBP and JPY. Indeed CHF could be added to this mix as a number of high profile analysts are calling for some serious weakness in CHF going forward, which makes Thursday evenings GDP release for Switzerland a must watch event (6.45pm NZT).

Cheers G.

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Australian Broking Firm Grabs New Zealand Broker

Posted on 13 May 2013

Press Release Friday, 10 May 2013

In a vote of confidence for New Zealand’s capital markets, BBY Limited (“BBY”) Australia’s largest non-bank owned full service stockbroker, has announced that it has expanded its presence in New Zealand by acquiring a controlling shareholding in Edge Capital Markets Limited, a privately owned broking firm specialising in the Futures and FX markets. The acquisition will allow the firm to expand its equities research and advisory services, and develop a stronger investment banking profile.

“BBY’s entrance to the New Zealand market enables us to add value to a new client base from which we expect strong growth” says Glenn Rosewall, Executive Chairman of BBY.  “New Zealand is a logical next step for BBY as the sale of state assets and the growth in KiwiSaver will see increased public interest, depth and activity on the NZX.”

The existing NZ principals and management will retain a significant shareholding in the new operation, which will be renamed BBY (NZ) Limited, and operate as a subsidiary of BBY.  The current executive management of Bryn Griffiths and Brent Weenink will be retained as Regional Head and CEO respectively, and will be joined on the Board by BBY’s Glenn Rosewall (Chairman) and Arun Maharaj.

“BBY through its extensive licensing will have the opportunity to offer one of the broadest base of products available toNew Zealandprivate investors and institutions. This includes international equities, options, bonds, futures, CFDs, margin-FX, Foreign Exchange, commodities and precious metals trading.” says Arun Maharaj, CEO of BBY “Having a New Zealand operation means we complement our Australian, UK and US teams with market information flowing around the world seamlessly.”

Bryn Griffiths was pleased with the acquisition, “We have enjoyed a close working relationship with BBY for many years, and this is a natural and positive step forward for us and our clients.  The Company is well placed to grow its advisor base, develop and deliver new services and opportunities in the New Zealand market.”

For further information, please contact:

Glenn Rosewall
Executive Chairman, BBY Limited
Tel: (02) 9226 0032
Email:   gar@bby.com.au

Arun Maharaj
CEO, BBY Limited
Tel: (02) 9226 0108
Email:   anm@bby.com.au

Henry Fung
Marketing Manager, BBY Limited
Tel: (02) 9226 0098
Email:   hxf@bby.com.au

Bryn Griffiths
Regional Head, BBY (NZ) Limited
Tel: (04) 910-1611
Email:   bgriffiths@edgecapital.co.nz

Brent Weenink
CEO, BBY (NZ) Limited
Tel: (04) 910-1610
Email:   bweenink@edgecapital.co.nz

 

About BBY

BBY is a proudly Australian & New Zealand independent financial services group and Australia’s largest non-bank owned stockbroker. BBY has offices and staff in Sydney, Melbourne, Perth, Adelaide, Gold Coast, Auckland, Wellington, London and New York. With an extensive global reach, BBY is able to service the local and international needs of high growth companies, institutional investors, broker dealers and private investors.

Today, BBY is one of the fastest growing, securities firms in Australia and New Zealand with an average of $100 million per day turnover on the Australian Stock Exchange (17th by market share, 2nd by options market share). BBY also ranks as the 4th Best Equity Capital Markets Bank in Australia according to the 2012 East Coles Survey.

Furthermore, BBY has stayed ahead of the curve by not only educating its client, but also by sourcing the best platforms on offer around the world. BBY Online, BBY Investing and BBY Education currently offer Australia and New Zealand’s largest range of tradeable instruments.

BBY has a wealth of Australian and international institutional clients with over $2 billion worth of capital raisings completed in the last 5 years.

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team Graham Parlane

Chart of interest - EUR/JPY

Posted by Graham Parlane on 27 March 2013

Hi

After a mammoth rally from 94.00 to nearly 128 since mid-2012 the EURJPY cross is showing signs of fatigue.

Breaking down the component legs, the JPY has weakened massively (USD/JPY 78 to 97) over the same period, firstly on expectations that new PM Abe would gain power and bring with him super easy monetary policy ideas and then a secondary rally on expectations that Abe would install the like-minded Kuroda as his BOJ Governor. Since the inception of Kuroda the same sounds bites regarding easy policy have been forthcoming but the JPY has actually strengthened. Is this the biggest ever example of the old adage ‘buy the rumour, sell the fact’?

Looking at the EUR leg, the EUR simply looks awful. The Cyprus ‘precedent’ hangs heavily, manufacturing indexes remain mired in heavily negative territory and constant growth downgrades have been forthcoming. Indeed ratings agency S&P today lowered the Eurozone growth forecast to -0.5%, increasing the recessionary outlook.

Moving to the charts,  the brief rally on the Cyprus resolution Monday was quickly reversed, the price action tracing out the bearish engulfing day which augurs strongly for more losses ahead. Supporting the bearish stance the 10/20 day moving average are crossing over to a negative alignment. On the shorter timeframes my ‘model’ has done a stellar job of capping gains and is currently pushing down suggesting strong resistance lies at 122.70/123.20 and falling.

EURJPY – click here to view chart

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NZD/GBP - are we justified up here?

Posted by Graham Parlane on 13 March 2013

Hi

The NZD/GBP has been trading around multi –decadal highs of late. With the drought and the spectre of what I think will potentially be a more dovish than expected RBNZ tomorrow is the NZD really justified up here?

I’m a trend trader at heart and I don’t really like to pick tops but…

The market is chatting about the 8.1% annualised rise in NZ house prices (data released yesterday) and how upset the RBNZ will be about that. But the central bank is clearly working to the introduction of ‘macro prudential tools’ as they call it, to restrain house prices without using the ‘blunt’ instrument which is the official cash rate. You see, the RBNZ hate hitting housing with a rise in the cash rate because that usually comes with a higher currency which hurts the tradeable sector. They’re forever between the rock and the hard place so to speak.

The moderate knowledge I have about these new tools can quickly be summed up here in the NBR articlehttp://www.nbr.co.nz/article/downside-risk-use-macro-prudential-tools-warns-rbnz-bd-136767

Simply put, the introduction of these tools will to some degree limit the need for rate hikes surely?

This impending change and the drought make me very wary of NZD strength at the moment. On the other side of the equation the U.K economy has its own problems for sure but the fact that GBP/USD has fallen 16 big figures in 10 weeks suggest to me the NZD/USD could easily play catch up resulting in a lower cross. Indeed, currently I think the GBP/USD is actually due a bounce from last night’s price action.

Looking at the chart of the NZD/GBP cross yesterday was the beautifully, and emotively named ‘hanging man’……..you don’t need to think too hard about whether that’s a good sign or a bad sign huh? Downside follow through is beginning immediately after in today’s trade. I have high expectations for a move lower as a result

NZDGBP – click here to view chart

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Chart of interest - AUD/EUR (the sleeper trade of 2013?)

Posted by Graham Parlane on 8 March 2013

Hi all

This is one of my dead set favourite trades.

Since the onset of the GFC the Australian dollar has appreciated against the EUR, almost doubling in value as the market sought refuge from the beleaguered EuroZone and finding haven in the high yield, proxy to China growth, AAA rated Australian dollar. What an incredible run.

AUDEUR – click here to view chart

However late last year things began to change with the Troika providing enough funds, and therefore time, for the EuroZone politicians to make the required fiscal changes i.e. labour market, pension reform etc. Meanwhile the RBA forecast an earlier peak in mining investment and resumed cutting rates.

It is my belief that the NZD and AUD currencies are vulnerable to their own success of the last few years (the cure for a high currency is a high currency – eventually it’ll hurt). I think too that Eurozone data will surprise to the topside in as much as it surely can’t get worse.

Technically the picture looks intriguing. We had the ‘head and shoulders’ break down below the neckline and then, as so often happens the retest. Now we look likely to resume the move that should head towards 0.7000

AUDEUR a closer look – click here to view chart

Cheers G.

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Chart of interest - Kiwi about to explode north?

Posted by Graham Parlane on 13 February 2013

All

The 1 month range of 0.8300 to 0.8450 has bought the Bollinger Bands in to a ‘trend ready’ state. The bout of USD weakness (my primary, and long held expectation, on U.S. QE activities) has seen the NZD/USD respect the 9 month uptrend (yet again) after breaking over the nearly 2 year trend line resistance back in December.

1)    Big picture

NZDUSD – click here to view chart

2)     A closer look – Held the 9 month uptrend, Bollinger’s are trend ready.

NZDUSD Closer Look – click here to view chart

Cheers G.

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