Monday Morning Thoughts

Goodmornin'

Plenty of things to consider, unfortunately I didn't get to read much over the weekend. Still, I like how I see the ball right now and my theme remains the same: more trouble is coming. Wall Street earnings this week and next will provide some real evidence of how the credit crunch has impacted financials. Whatever rubbish they spin off their results (BSC and LEH will surely tell us about the vast number of "opportunities") investors might finally spot the enormous mess in everything from mortgages to quant funds.

Horrible data out of Japan overnight and Goldie said in a note that there's a 64% chance of a recession there. Well, no shit. I'm not buying the JPY because of economics in the first place. I'm buying the JPY because I see further risk reduction ahead. That said, I'm very happy to maintain my basket of JPY, CHF, VIX calls and Eurodollars which I entered on Thursday. If anything, I'd add to this basket.

UPDATE: short USDJPY @114.80, target open. Stop now at 113.50. Overnight low @112.60.

Not looking for new trades right now but who knows. I'll simply play it slow as the week begins.

Today's data (GMT):

0130 Australia July home loans (1.1%)

0130 Australia July investment lending (14.8%)

0500 Japan August economy watchers’ survey, current (44.7)

0500 Japan August economy watchers’ survey, outlook (46.7)

0600 CH Central bankers meet at Bank for International Settlements

0645 France July industrial production (-0.8% y/y)

0645 France July manufacturing production (-1.0% y/y)

0830 UK August producer price index, input (-0.5% m/m)

0830 UK August producer price index, input (0.1% y/y)

0830 UK August producer price index, output (0.2% m/m)

0830 UK August producer price index, output (2.4% y/y)

0830 UK August PPI, core output (0.2% m/m)

0830 UK August PPI, core output (2.3% y/y)

0830 UK July DCLG house prices (12.1% y/y)

1230 US Atlanta Fed President Lockhart speaks

1500 US San Francisco Fed President Yellen speaks

1700 US Dallas Fed President Fisher speaks

1900 US July consumer credit (US$ 13.2 billion)

2245 NZ Q2 terms of trade (2.0% q/q)

2330 NY Federal Reserve Governor Mishkin speaks

2350 Japan July machine orders (-10.4% m/m)

2350 Japan July machine orders (-17.9% y/y)

(Source: GCI Financial)