When you also need resilience to work in finance

Do you know @RossEdgley ?

He is an extreme athlete and sports scientist who in 2018 was the first and will certainly remain the only one to swim around Great Britain without ever setting foot on land.

157 days, 1780 miles, 1 million Kcal consumed, 2.3 million arm turns. 

Inhuman, extraordinary, certainly exceptional and I recommend you to read his book "The Art of Resilience".

To achieve this feat Ross used the tides and like the trends on the markets at the moment, they change about 4 times a day, in 6 hour increments.

So he swam in 6 hour shifts, twice a day, which means that, counting the days his support boat had to seek refuge from the storms, he swam 1500 hours at sea.

It doesn't make anyone dream, but the parallel with the changes in market trends at the moment is quite easy to draw.

He had to fight against waves, wind, jellyfish and storms, a bit like you facing your screens between the economic figures, the number of Covid cases, the tweets from Trump and the acts of violence in the world.

He attributes his success to a few rules, including his ability to focus only on the elements he could control, and that's where his adventure and yours part ways.

Because not only can't you isolate yourself from the events of the market, but you have to suffer the analyses of the other participants, including journalists...

As New York and New Jersey plan to open their economies on Monday, the contamination figures for the southern states are rising, but are they?

Not if you read the hospitalisation numbers.

We can argue that the US is still in the first phase and that the title is actually correct, but for the moment, according to the American Institute for Economic Research, the US health care system is under much less pressure than it was in mid-April.

Donald was somewhat right when he said that if we stop testing we would find fewer cases, but the mainstream media is focusing on the increase in cases as opposed to the increase in hospitalisations.

The situation is therefore perhaps less serious in the US than it seems and Citi raises an interesting point about the FX swap lines that the Fed has multiplied with its counterparts since March:

"After an extreme widening of FX basis in March, the Fed implemented a myriad of measures to help normalize the market. The most significant of these was the extension of FX swap lines to foreign central banks... With the market now having normalized, and the most acute period of pressure behind us, this naturally raises the question - when will the Fed wean the market off its support?”

They have a point, the situation has calmed down a lot:

We're back to pre-crisis levels and we're going to have to follow the Fed's statements on this.

From a purely FX point of view, the Usd had run amok before the Fed expanded its financing capabilities around the world and reached its peak on March 23.

If you put the two charts in perspective, you'll see that the US central bankers are certainly scratching their heads about it.

I could have done that, but I have another subject to talk about before the opening of the session.

Friday, June 19th, Quadruple Witching Day.

The expiry of June options for single stocks, futures, indexes and index futures.

This is probably what explains the flat electrocardiogram of the markets since yesterday and again this morning in Asia.

If you look at the DTCC data for expirations in Eur Usd, the 1.12/1.14 zone represents 34% of the total expirations, with a nice and potentially sticky €1bn strike 1.1200.

We won’t make the crowds rise to their feet today in FX.

Have a great day and weekend.

Lousto