GBP turned right on the mid-Aug levels.
If you looking for stronger GBP related plays. Banks: Spanish lenders Santander and Sabadell have business in the U.K.; Lloyds has already priced in the negative Brexit outcome
Carmakers: In a so-called soft Brexit scenario, all the German and French automakers would benefit, along with Ferrari
Small and midcap stocks: Ipsos, which has about 10 per cent of its sales in the U.K.; Europcar, with about 15 per cent of total revenue in the U.K., would benefit from a stronger pound
Utilities: Suez and Veolia would be the most positively impacted
Construction and concession: Groupe Eurotunnel would be the most exposed as 50 per cent of sales are in pounds and 50 per cent in euros, but the company has more costs in euros; Ferrovial has a positive leverage as about 14 per cent of value comes from U.K. assets.
Note the candle “reversal” in the yuan. Haven’t seen this in a long time.
DXY index vs net non-commercial futz. USD Next crowded trade after blow outs in VIX shorts, Gold shorts to start feeling the heat?
Tencent extended recent gains overnight. Sure the trend is negative but if you are thinking about EEM, be sure to check out Tencent first. The two continue moving in tandem.
Iron ore vs SXPP and Rio chart.
iTraxx – last time we traded here (deducting the October px action) was in Sep. Back then VG1 traded just shy of the 3300 level. The “logic” is a bit simplified but shows how credit has reacted relatively less.
Surely the EEM trend down continues, but with this last USD move, one should watch the EEM space carefully. Everybody hates EM and loves USD and given the fact so many crowded trades have reversed lately, this one should be watched closely. Chart of EM vs USD.
% of assets with a negative total return chart (DBK)
AUD absolutely exploding. Above the negative trend as well as crushing the 50 day.
So the US sold off due to among other things the tariffs, China, EM “stress”…. the SPY, QQQ, FXI and EEM since the October sell-off started. Clear winners FXI and EEM…
