Read on the Trading Floor - 10 Jan 2024
Today’s focus… has the year begun?, 2FA, earning season and much more
Macro Themes At Play
Theme 1 - The waiting game = condensed ranges
Theme 2FA
Theme 3 - Earning season is upon us
Further reading and listening of note
Theme 1 - The waiting game = condensed ranges
I'm not sure what is worse, watching Manchester United's first eleven squeeze past Wigan (a League 1 side that are playing under the constraints of a transfer embargo) in the FA Cup third round or watching these G10 FX and FI ranges compress. It's been an incredibly slow start to the year, fingers crossed CPI can generate something more meaningful. With EURUSD stuck in a gamma range either side of 1.0950, carry is in vogue (USDJPY > 145.00) as VIX drifts lower, this market needs some energy and some fresh story lines. It's worth nothing that Vix seasonals start to drift higher from Jan 14 (h/t Brent Donnelly's Almanac), worthwhile looking for some Vix support levels (
- JATS PT INDEXES).USDJPY = A carry trade
Source: tradingeconomics
Theme 2FA
I just love this chart - sums up Bitcoin in a nutshell. 48,000 paid, off 45,000 given and now the market waits for the real announcement. Last night's vol induced of course by the SEC X account being hacked. All the boomers are now changing their passwords before they release their pension flows into crypto (Ecoinometrics - Bitcoin in everyones retirement account, how big is the opportunity?).
Source: FX Dukascopy
Good luck to anyone trading today's ETF decision with leverage. If anything, long the underlying and selling calls as an overlay seems to be the best hedge for medium term hodlers... or roll some exposure into ETH, the next one up to the ETF rank... sell calls in XBT to own OTM ETH calls...? (This is not investment advice, especially considering my disdain for the antics within the crypto industry... for a bullish view follow my colleagues work at The Morning Hark)
Reuters - Companies disclose expected fees for spot bitcoin ETFs ahead of SEC decision
Unchained - You'll Never Be Bored in Crypto
Reuters - SEC probing fake post on its X account, bitcoin ETFs not yet approved
Unchained - You'll never be bored in crypto
Theme 3 - Earning season is upon us
Friday is an important starting point (JPM, BofA, Wells Fargo, Citi, BlackRock, BNYM) before early next week we get the regional banks. RPP, CRE exposure, BTFP support coming to an end, QT, recession risk etc etc. The strength of the US banks will tell the market a lot about Q1 economic performance of the economy.
FactSet - S&P 500 Financials Sector Q4 Earnings Preview: Banks Lead Earnings Decline
FactSet - Analysts Made Larger Cuts Than Average to EPS Estimates for S&P 500 Companies for Q4
Source: Earnings Whispers
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Top Pieces
Discovered on Harkster.com
Bloomberg - Lael Brainard on the White House’s Role in Bringing Down Prices
Saxo Bank - US Treasuries: where do we go from here?
Econostream - ECB’s Schnabel: Additional Data Needed to Discuss Interest Rate Cuts
SCMP - China’s economy holds ‘real potential’ in 2024, think tank predicts upbeat 5.3% GDP growth
The Lead-Lag Report - All Eyes On China
FT - Emerging market debt issuance hits record as borrowing costs fall
More attacks in the Red Sea
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