A top-down tactical approach to trade ideas across assets and time horizons, drawing from proprietary sentiment technical indicators.
Contact Us for a trial.
Multi-Asset Strategy Team
Multi-Asset Strategy ResearchMulti-Asset Strategy Products: Multi-Asset Strategy Monthly, Multi-Asset Strategy Weekly, Absolute Essentials, Trade Alerts.
Page 1: Next
In light of current market volatility, we felt it would be worthwhile producing an update of the weekly Technicals Essentials report. In this we highlight 12 key sentiment charts in multi-asset, which are at the centre of current market moves.• Elements of risk aversion sentiment story stretched (p1, p4-5)
• VIX hits Sentiment Barometer Indicator (SBI) reversal levels – supportive for S&P500 (p2)
• US high yield/investment grade, TIPS and Bond vol extended (p2-3)
If you are not already on the weekly Technicals Essentials distribution list please feel free to contact us and we can add you going forward.
On our estimates, the virus has so far shaved as much as 60bps off 10-year UST yield levels, implying a steep fall in US and global economic activity. We consider fixed-income investing implications.
In this week’s Essentials we look at the sentiment and technical outlook for overbought US Dollar and Gold. We also highlight the notable implications of EUR/JPY for eurozone versus Japanese equities.
FX: DXY, EUR/USD, USD/JPY and AUD/USD sentiment becomes stretched (p13-15)
Bonds: US TIPS yield hits oversold SBI territory (p10)
Commodities: Gold and Lumber optimism hits stretched levels (p17/19)
• A stronger US dollar in 2020 has not changed some core elements of EM FX relative performance from 2019. The weaker currencies still share some mix of low real yields, fundamental imbalances and heavy exposure to global trade.
• The Mexican peso and Indonesian rupiah are again among the strongest currencies, helped by relatively high real yields. We re-introduce a pro-MXN ‘relative value’ recommendation.
• Recommending to take profit on long RUB/ZAR and switch to RUB/CZK. The koruna looks vulnerable to global supply chain disruption.
In this week’s slightly shorter edition of Essentials we highlight: the polarised risk-appetite picture painted by our sentiment indicators; stretched pessimism on euro TW as a big support level neared; and risks of a sentiment headwind for Lumber and US Homebuilding.
Equities: EMU small-caps still fighting headwind versus large-caps (p6)
FX: US Dollar Index, EUR/USD, EUR/GBP, EUR/CHF and SGD/TWD become extended (p10/12)
Commodities: Lumber optimism hits stretched levels (p15)
This research report is issued by Absolute Strategy Research Ltd, which is authorised and regulated by the Financial Conduct Authority (“FCA”). Absolute Strategy Research Services Inc. is registered as an investment adviser with the US SEC, and is responsible for all communications and dealings with, and only with, US persons. The report is intended only for investors who are Eligible Counterparties or Professional Clients, as defined by MIFID and the FCA, and may not be distributed to Retail Clients.
Absolute Strategy Research Ltd does not solicit any action based upon this report, which is not to be construed as an invitation to buy or sell any security.
This report is not intended to provide personal investment advice and it does not take into account the investment objectives, financial situation and the particular needs of any particular person who may read this report.
This research report provides general information only. The information contained was obtained from sources that we believe to be reliable but we do not guarantee that it is accurate or complete, and it should not be relied upon as such. Opinions expressed are our current opinions as of the original publication date appearing on this material only and the information, including the opinions contained herein, are subject to change without notice.
This research report may not be redistributed, retransmitted or disclosed in whole or in part, without the express written permission of Absolute Strategy Research Ltd.
© Absolute Strategy Research Ltd 2016. All rights reserved.
Absolute Strategy Research Ltd. 1-2 Royal Exchange Buildings, London, EC3V 3LF. Phone: +44 (0) 20 7073 0730 Fax: +44 (0) 20 7073 0732. www.absolutestrategy.com.
Absolute Strategy Research Ltd is registered in England and Wales. Company number 5727405. Registered Office: Salisbury House, Station Road, Cambridge