FxWirePro: USD/TRY Extends Upside Traction on Turkish Central Bank’s Rate Cut Again – Uphold Debit Call Spreads Bidding
Cryptocurrency Derivatives Series: A Glance at Features of Bakkt’s Bitcoin Futures Contracts of Daily and Monthly Tenors
FxWirePro: Aussie looks puzzled amid mixed bag of indicators ahead of Fed – Bid 3m AUD/USD OTC and deploy diagonal debit spread
BoJ remains under pressure to ease policy, achieving inflation goal likely to become even more elusive: ANZ Research
Cryptocurrency Derivatives Series: Primer on Driving Forces of VanEck-SolidX Bitcoin ETF Withdrawal Decision
Digital Currency Revolution Series: London-based P2P Crypto-Solution, CMMPay Comes Up With ‘Your Keys, Your Crypto’ Concept
Regulatory Series on Cryptocurrencies: Saga of QuadrigaCX Continues As Canadian Revenue Agency Gears up For Tax-Audits
Cryptocurrency Derivatives Series: eToroX’s Lira To Support Crypto-Derivatives With Liquidity Providing
FxWirePro: Kiwis Still Fragile Ahead of RBNZ – NZD FX Derivatives Trades Recommendations
RBNZ has traditionally been somewhat more sensitive to global developments. A rate cut is already essentially fully priced for next week, and expectations increasingly seem to be for a dovish outcome. The combination of disappointing local business confidence data along with renewed global concerns could still manage to tilt the policy meeting dovishly as a result (we still view the terminal rate ultimately arriving at 1% given current growth and inflation undershoots). Positioning as of earlier this week has also lightened up recently which projects scope for further NZD downside (refer 2nd chart). And as described above, both AUD and NZD tend to be laggards in the month of August, and given the current risk and central bank environment, seem poised to deliver another month of antipodean underperformance (refer 1st chart).
For these reasons, we increase our high beta exposure by layering in a new NZDUSD short in cash to capitalize on both an underwhelming local story along with the defensive risk environment. Meanwhile, the uptick in vol and strong move in the spot has brought our NZDJPY back into the green and remains another core expression of a defensively-oriented portfolio. Ultimately, August looks like it could be a long month between now and the September 1 tariff deadline, which seems liable to keep NZD on the back foot.
NZDJPY’s two-month-old decline remains intact, with below 69 levels looks vulnerable in the near term. Global risk aversion over the past month has boosted the yen’s appeal.
In the medium-term perspective, we foresee further slumps at year-end. BoJ monetary policy is likely to remain accommodative for an extended period.
Uphold a 6m NZDJPY put spread. Bear put spread (35d/15d strikes) (Spot reference: 69.613 levels). Paid 1.07% at the end of May. Marked at +1.13%.
Alternatively, we foresee NZDUSD major downtrend continuation up to 0.64 levels, shorting futures of mid-month tenors have been advocated ahead of RBNZ monetary policy with an objective of arresting further potential slumps, we wish to uphold the same positions. Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position. Courtesy: JPM