1 Dec 2016

Finally, OPEC agrees to cut production by 1.2mbbl/day. OPEC finally used its last bullet correctly and hit the target. During the week , Oil prices had gone down that OPEC deal was not going to happen as Iran and Saudi Arabia kept pushing their own terms. Prices fell and later rebounded, crude oil went past 50$. My investments in shorting yen and long on pound has worked right as well. I will be sticking to my pound/yen cross position as my conviction of market trend is getting stronger. If Yen keeps falling, I will short more and build up more in pounds. After Oil rallied and passed 50$ over, I reduced my position in the oil and has kept few contracts under my belt. I will wait for the market to take the first step and watch where the trend goes. Because oil is getting into new price territory that it was not there for more than a year. Too much rise in oil can increase production in the US, furthermore how OPEC members will adhere to the terms of the deal brings a bit more uncertainty to prices for the next 6 months. However, OPEC deal was historic after 8 years of OPEC not being able to come to an agreement on production.
 I think market’s focus will now change from oil to other asset classes as there is not going to be huge market movers from now on for the foreseeable future. EU will be closely watched as there are elections coming up in Germany, Italy, France. If Germany and France vote for far rights candidates that will raise nationalistic views and will cause at least temporary fall in Euro. As I did not have too much time following EU politics due to my current work, I will stay off the course for now on Euro. Therefore building hypothesis on Euro move is, for now, pointless as I will be prone to making wrong decisions. I will jump on the wagon only after the results.
US stocks have been up and been trading around the same range for the last week up and down. OPEC decision gave a temporary boost to stocks around the globe. US energy stocks climbed higher. One day before the OPEC meeting on 30 of, I decided to buy US energy stocks however I forgot to do it. I think I should start writing down my to-do list.
Trump wants to appoint former Goldman Sachs banker as Treasury secretary. It seems Trump and Rand Paul both wants to cut taxes on middle class. This will give a rise to US stocks and I think Trump will make this important issue in his agenda during administration  I am a, however, the skeptic of FED rate hike for now which makes me take my foot off the gas to invest in stocks with larger exposure. I will build positions on US stocks to the level that it won’t hurt my portfolio if things go sideways.
My position in US bonds (short) is on the side with FED hike. My long positions in US stocks should be a hedge for them.
I will reverse my positions if any announcement that comes from FED that will likely have a negative impact on my portfolio.
Bottom line is, build up pound/ yen cross position- short yen, long pound.  Buy US stocks with low exposure to my portfolio, short US bonds, long on oil.
 1
Check below pdf for full version of Activity Statement for the period.
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