EURUSD pops just as we bought - exited our S&P short

There's no doubt that yesterday was very much "risk on".

 

Read on below for details of our EURUSD and S&P exits and first look at a new strategy built around Gold. Meanwhile our Intraday FX Programme hit 0.39% gains for the year. 

 Given an ECB release on LTRO usage yesterday, two things became clear.

 

1. The stigma of using the facility has all but vanished with a number of banks, across different geographies and capital structures, tapping it.

2. Speculation upon the net recipient of the funds has been clarified, with the ECB indicating that it included any new Euros in the deposit calculation - implying that this figure has risen regardless of end destination (hoped and believed to be Sov. bonds).

 

With these developments, our bias has shifted from neutral (and hedged) to bullish over the short-term. We exited our S&P short and our EURUSD long, having seen it rip over 100pips, for a slight net loss.

 

So we are left with an in-the-money Gold position and will continue to add to this into the weakness noting that the overnight session is tending to produce a lot of demand relative to the day session.

 

More research, and hard numbers, to follow.