WAITING GAME - If you're concerned that things were super slow on Monday, don't be. Oh and by the way, it all could be very slow again today. Why? Well, I'm sure you all already know the answer to that question. Tomorrow we get some major central bank event risk in the form of the BOJ and Fed decisions. So don't fret. Just enjoy the quiet and get ready for the storm that is likely to come in the middle and latter half of the week. As far as existing positions go, things are good. We have AUDNZD running back to cost and the SPX500 position also just around cost and looking to roll again.
LOWER STOCKS - I actually saw a really nice bit of research on Twitter making a strong case for lower equities from this week into month end on account of some analog analysis with presidential cycles. This would be a welcome development for us given our short equity exposure and all things considered, this is just one more bit of icing to add to an already tasty cake suggesting a big drop in stocks around the corner. Realistically, a bearish catalyst for stocks this week would be less dovish BOJ and Fed decisions. Such moves would once again put a stamp on rhetoric that has been warning about the limitations of monetary policy.
DOVISH ≠ BULLISH - But again, it's important that I stress the fact that even if the BOJ and Fed are more dovish than expected, I don't believe these gestures will do anything to prop stocks and sentiment all that much. In fact, I have already argued that more dovish could actually end up being more bearish risk as investors become frightened that even with easy money policy stocks still can't find any bids. This would be a reflection of a lack of confidence in the system at this point, with market participants knowing full well they have sucked out all the water from the monetary policy well.
ISOLATED ACTION - Of course, I will be watching and monitoring market moves on Tuesday and we could get isolated volatility here and there. There have been rumblings of movement in our AUDNZD position and with the RBA Minutes and Kiwi GDT auction due on Tuesday, this could invite a nice move, hopefully to the topside in AUDNZD. Technically, things are looking pretty again, so let's see. Otherwise, I will be looking for any other interesting price action and would still be happy to pick up some GOLD on an overextended intraday move.