Archive - May 14, 2015 - Story

"To end our discussion of the forex markets, we think it is time to return to an old friend: long of the English speaking currencies/short of the Yen and we shall do so en masse this morning" - Gartman, May 12

It has gotten to where just the lack of a rout in Bunds or any other government issue is enough to activate the "bullish" outside stop hunting algo, which is probably why ES has jumped overnight in another illiquid, newsless session. Curiously, Bunds shave not sold off even though the EUR has jumped sharply by almost 100 pips overnight to a 3 month high also on no news (with some amusing acrobatics by the USDJPY alongside) traditionally a bearish indicator for the Dax and thus the S&P. Perhaps the algos are just late, or maybe the "weak dollar is good for stocks" thesis has been activated, but in any event this morning's ramp higher in the ES will continue until all upside stops are hunted down by Virtu and crushed mercilessly.

Having rebounded along with practically every other risk-asset class in the world over the last month or so, Chinese Iron Ore futures are collapsing tonight. Despite the promise of Chinese LTROs expanding credit (just like they didn't in Europe), iron ore prices are down around 4% - the biggest drop in over 2 years - to as low as CNY419 (or around $62) as China Iron & Steel Association warns that overcapacity in the seaborne iron ore market will persist through to at least 2019 as the world’s largest suppliers expand production further.