Things continue to develop in a negative way, including the U.S. moving more military equipment (over 100 fighters total known) to Eastern Europe, the Aegean and Black Seas (CVN-77 carrier battle group in Aegean, destroyer in Black Sea), as well as continued Russian advancements in Crimea and Eastern Ukraine (directly and through proxies). Putin's speech the other day was not a white flag; he was merely making his case to the West, particularly Europe. While he may have been outmaneuvered that day, he's not done yet. Crimea will vote to join Russia...will/how Russia accept, and what will the new Ukrainian government do, and if Ukr.govt responds with anything other than protesting at the U.N., how willing is the West to back them up? So far eastern Ukrainian provinces have rebuffed pro-Moscow moves in that direction...how much harder is Putin willing to try? I suspect a little more...
I don't think we will see a hot war soon (if at all, it will be undeclared, and everyone will try to give the other a face-saving way out -- even Putin doesn't want a direct confrontation), but everyone's military in close proximity with undisciplined militia-type groups running around makes for a tinderbox looking for a spark, especially once the Crimean vote happens.
I want to make a bet, but there's no way to determine if/when the situation will escalate, so I want a bet that I can hang on to long-term. AUD/USD seems like the best one given fundamentals (risk to this bet is the recent comments by RBA re: maintaining interest rates and "jawboning," so any data that would keep them on hold; generally positive from Australian and/or negative data from U.S; any positive growth/outlook from Chinese fixed-asset investment/postponing of rebalancing; expanding credit growth in China ). I don't think the AUD is ready for another leg down yet (inevitable, but when?), I just think this is the safest way to make a leveraged bet.
I'm hoping this to be a short-term trade, gain or loss, and it is not with alot of leverage. I'm hoping for events/saber-rattling near-term, and I plan on dumping when that happens, as both sides will then try to keep the situation from escalating (how many times can I play this fiddle? we'll see...).
Short June14 AUD/USD futures at 90.15.
UPDATE: No new Ukraine news over the weekend but alot of bad Chinese trade data, without alot of movement in AUD/USD. Maybe its not ready yet, so I'm closing out for now with a small gain. Closed at 89.59, gain of 5.9%.
I don't think we will see a hot war soon (if at all, it will be undeclared, and everyone will try to give the other a face-saving way out -- even Putin doesn't want a direct confrontation), but everyone's military in close proximity with undisciplined militia-type groups running around makes for a tinderbox looking for a spark, especially once the Crimean vote happens.
I want to make a bet, but there's no way to determine if/when the situation will escalate, so I want a bet that I can hang on to long-term. AUD/USD seems like the best one given fundamentals (risk to this bet is the recent comments by RBA re: maintaining interest rates and "jawboning," so any data that would keep them on hold; generally positive from Australian and/or negative data from U.S; any positive growth/outlook from Chinese fixed-asset investment/postponing of rebalancing; expanding credit growth in China ). I don't think the AUD is ready for another leg down yet (inevitable, but when?), I just think this is the safest way to make a leveraged bet.
I'm hoping this to be a short-term trade, gain or loss, and it is not with alot of leverage. I'm hoping for events/saber-rattling near-term, and I plan on dumping when that happens, as both sides will then try to keep the situation from escalating (how many times can I play this fiddle? we'll see...).
Short June14 AUD/USD futures at 90.15.
UPDATE: No new Ukraine news over the weekend but alot of bad Chinese trade data, without alot of movement in AUD/USD. Maybe its not ready yet, so I'm closing out for now with a small gain. Closed at 89.59, gain of 5.9%.
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