Factor Special Alert — Eurodollar spread
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Entries by Peter Brandt
NZD/CAD and Crude Oil
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Factor Interim Update, November 2, 2016
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October Webinar Recording
October Webinar Recording
This webinar was recorded live October 13, 2016 for members of the Factor Service. We are releasing this month's webinar (one time only) as a public blog post for all to see. More information on the content and discussion points of the webinar can be found below the video. Details regarding the Factor Service can be found near the bottom of this post.
Factor Update – October 30, 2016
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CORRECTED Factor Alert — Eurodollar spread, October 27, 2016
This is a corrected Factor Alert regarding the Eurodollar spread strategy. I was not as clear as I needed to be -- the confusion coming from the fact that higher yield rates equal lower Euro prices. It is easy to become confused in the process, especially when dealing with spread differentials.
The trade I am in and recommend is to be long the nearer contract (ED5) and short the deferred contract (ED10). This strategy anticipates that deferred contracts will build in an expectation for larger interest rate hikes in the future than are currently priced into the market. Narrow spreads, as we have now, anticipate only minor Fed rate hiking in the future.
The email below corrects the previous communications. Sorry for the confusion. The charts are more clearly labelled.
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Eurodollars (interest rate) are by at least one magnitude the most liquid futures market in the world. The Eurodollar market was one of my favorite markets to trade prior to the insane QE-infinity of the world's central bankers. It is insane how liquid Euros are -- typical monthly volume will exceeds 40 million contracts. Unlike most futures markets wherein the liquidity resides in the nearest contract, Euro contracts are liquid for several years into the future.
Special Report — The Three Most Important Ways to Track Trading Performance
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Factor Alert, Japanese Yen, October 27, 2016
The focus of this commentary is on Yen futures and spot USD/JPY. Remember, a bearish outlook for Yen futures is equivalent to a bullish outlook for the USD/JPY spot rate.
Euro Dollar Forex Pair
Euro Dollar Forex Pair
It is time to take another look at the Euro Dollar Forex Pair from the 30,000 foot level. The quarterly graph displays two prominent features. First, the 6½-year descending triangle top completed in Mar 2015 has an unmet target at .8670. Second, the decline in Mar 2015 found strong support at the 45-year trendline.
Factor Update, October 23, 2016
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