Oh What A Night!

  • AUDNZD move too tough to ignore
  • Big profit in March adds to yearly gains
  • Looking at central bank decisions
  • Bank of Canada most intriguing

CELEBRATE! - Much as was the case in the previous week, nothing was going on for a few days until it all picked up on Wednesday, Thursday. Well, last night was a big night for our book. I was already sitting on a very nice AUDNZD position, long from 1.0595, with the market trading just over 1.1000. Now, I didn't have any plans to exit the trade, but with the RBNZ surprising markets, it was just too hard to stand back and not take profit on the ensuing move. And so I exited at 1.1224 and was a very happy man. I would still like to get back in on a dip, but for now, a nice profit has been made and this puts us up an amazing 7.4% in March already and an even crazier 23.4% year to date. I really can't remember a start to a year like this ever, and I'm smart enough to realize that I need to keep my head down and just keep focusing on doing what I've been doing. The volatility this year has been amazing for trading and I think I have made some tweaks to my methodology that are paying off. Now I did jump in and sell AUDNZD in an attempt to catch a correction lower, but nothing panned out in several hours time and I opted to jump back on the sidelines after booking a teeny tiny profit there.

NOT SO OBVIOUS - Onto my broader thoughts on all this central bank activity and the upcoming ECB. Right now I'm thinking the Bank of Canada decision could end up being the most interesting decision of the week. While the RBNZ and ECB are getting more attention, these decisions are just more of the same 'ease some more' central banking. The Bank of Canada decision was exciting in that the BoC was in a position to be less dovish with the Canadian government stepping in with a fiscal policy response. This is something we haven't seen a lot of these past several years and with central bank policy so exhausted, it is going to take a wider fiscal policy response to keep this global economy going. This is going to be the next effective tool, and with the RBNZ and ECB, we aren't seeing that. I would say, keep an eye on the stock market today. If the ECB eases by more than expected and the stock market can't put in any meaningful rallies, this should be taken as a sign that unless governments step up in a big way, we are headed for ugly times ahead. I will be on the lookout for new trades and will let you know via SMS/email notifications if I do anything.

Bank of Canada decision was the most interesting the week IMO. Via @joelkruger

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