Follow-up on last week’s trade ideas: Change our spread Long NZDJPY Short Nikkei future Mar 13

With regard to the former idea of trading the spread Long NZDJPY Short Nikkei Future we have been encountered a loss of -2,51%. This was due to the high volatility of the Nikkei pushed up by market sentiment. However we believe that the rationale of the trade is still valid and we suggest the following adjustments: weight less the Nikkei (0,667) and change the pair buying the USD/JPY. Indeed we believe that the USD/JPY is a better pair because, according to an analysis of the skew we see that it has one of lowest curvature thus indicating a more bearish sentiment by investors. The USD is less exposed than the NZD in case of a risk-off environment and finally the USD is set to appreciate as the US fundamentals are solid.

The stop/loss is a combined loss of 1%. The take profit is at level of the spread equal to 2.

Moreover we have decided to close our position in the GBPUSD with a profit of +1,42%.

 

nikk


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