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Market Radar Profile picture
@themarketradar
Nov 11, 2022 • 5 tweets • 4 min read • Read on X
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Daily Currency 🧵- Nov 11th, 2022

$DXY #DXY

Huge moves happening, some that require attention. Starting with the dollar, we saw this blow through momo yesterday and continue to fall this morning. To get a solid trend shift, we're going to need to see some components shift too! Image
A trend shift in the dollar will add more confirmation to the Risk-On regime, which has been brewing under the surface for over a month now. Market Illiquidity improving is supporting the narrative of a possible shift. This really comes down to how the major components trade... Image
$EUR (largest $DXY component)

The EUR was able to blow through parity and get a good squeeze going in the last two days. We still have some distance to momo, a failure to break there will give very low confidence of a DXY trend shift sticking.

$EURUSD #EURUSD #USDEUR $USDEUR Image
$JPY (2nd largest $DXY component)

The Yen was able to blast through the wall and head for momo. We still have some room to cover and if we can't get through there it's going to be really hard for the EUR to carry DXY all alone. Big component.

$JPYUSD #JPYUSD $USDJPY #USDJPY Image
$GBP (3rd largest $DXY component)

The pound has been less volatile than the other components and continues to slowly make higher highs and lows. The EUR actually has less distance % wise to momo now than this! 👀

$GBPUSD #GBPUSD $USDGBP #USDGBP Image

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More from @themarketradar

Market Radar Profile picture
May 21, 2023
Time to debunk the Fintwit myth surrounding the TGA balance & market liquidity.

As the debt ceiling approaches, talking heads are claiming a debt ceiling resolution would be "bearish" for stocks as liquidity would get removed from markets.

Here's why they're dead wrong 🧵
To understand this perspective, let's consider their reasoning. Why should the Treasury General Account (TGA) impact liquidity? There's a calculation circulating that assumes net market liquidity stems from the Fed Balance Sheet. It looks like this. Image
So what does the above formula aim to represent? It's assuming available market liquidity by stripping the Fed balance sheet of all other balances that are not in the public sector. Hence the removal of the cash in the reverse repo facility and TGA.
Read 7 tweets
Market Radar Profile picture
Apr 25, 2023
With all the noise on Sovereign Credit Default Swaps, given their recent rapid rise, I think it's important we simplify what this actually means for markets...

CDS 🧵👇 Image
Sovereign credit default swaps (CDS) are a type of derivative that allows investors to protect themselves against the risk of a country defaulting on its debt. Essentially, the buyer of a CDS contract pays a premium to a seller. Think of it like a put option on a country.
If you watched The Big Short, you'll be familiar with the word default swaps. Michael Burry used corporate credit default swaps to bet against the big banks/mortgage baskets. This thread will focus on credit default swaps related to countries. Anyway back to it.
Read 18 tweets
Market Radar Profile picture
Apr 13, 2023
The differences between Onshore and Offshore Dollar Funding are extremely important.

Foreign demand is what drives reserve status.

There is something valuable about having OTHER countries wanting to hold YOUR currency on THEIR balance sheet.

It goes something like this:

🧵
The primary difference between onshore and offshore dollar funding refers to the location of transactions. Onshore funding occurs within the United States, while offshore funding takes place outside of the US. Both types of funding are important for global trade and finance.
One key difference between the two is the level of regulatory oversight, as onshore funding falls under the jurisdiction of US regulators. Whereas offshore funding does NOT fall under the jurisdiction of US regulation.
Read 18 tweets
Market Radar Profile picture
Nov 11, 2022
Let's take a moment here to understand WHAT is exactly going on in markets as people's emotions are bound to run rampant after what happened yesterday. We're going to go over $ES and what has happened psychologically to those participating...

🧵👇🏼

$SPY $QQQ $IWM $DIA
Let's start with what happened on Oct 14th, we saw the emergence of underlying shifts in the #System that indicated just maybe there was more to Risk-On than would have met the eye. By this point, it was apparent to hedge an upside move into FOMC, Midterms, and CPI...
Post-FOMC markets react poorly and slid lower. The big caveat though was in the following session the market had trouble going lower. Now, why would that be IF Powell went full hawk? They tried to bring it lower...but couldn't. This is where we enter back into the Fed day range..
Read 10 tweets
Market Radar Profile picture
Nov 10, 2022
#Inflation: It’s existed since money's creation, yet people still don’t understand where it comes from and how to solve it. Societal leaders play games because they don't want you to realize this is the biggest scam of them all.

Let’s start with understanding inflation:

🧵👇🏼
Inflation measurements are derived from the changes in the Consumer Price Index “#CPI” over time. Inflation is the general increase in prices and fall in the purchasing value of money. Remember, Inflation is required in any monetary system to incentivize spending…
Overlaying CPI of major economies, we can see that there is a GLOBAL trend higher. Leaders worldwide have done a stellar job of criticizing companies for “price gouging”. Most of them are simple, they just point their finger at companies that sell major resources, like $XOM. Image
Read 12 tweets
Market Radar Profile picture
Nov 10, 2022
Daily Currency 🧵- Nov 10th, 2022

$DXY #DXY

The dollar is holding a bid ahead of the CPI print today. Remember, it's bullish trend until it isn't. Lower VAMP AND momo MUST hold for the trend to remain intact. Image
$EUR (largest $DXY component)

EUR is back under parity this morning ahead of US CPI. For the time, we're still holding above mid-VAMP, but parity has been the key for quite some time now. If we can't hold it post-print, watch for lower VAMP.

$EURUSD #EURUSD #USDEUR $USDEUR Image
$JPY (2nd largest $DXY component)

Despite the Yen edging off its lows, we're still under the BoJ initial intervention level. Can we get back above and squeeze some shorts or will this shit the bed post CPI? Trend remains🐻

$JPYUSD #JPYUSD $USDJPY #USDJPY Image
Read 4 tweets

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