Invast Launched ST24 Platform in Australia

Invast Insights

Week Commencing April 28, 2014

www.invast.com.au | 1800 468 278

This week we look at the following topics:

1.0 What the RBA can learn from the RBNZ

2.0 Stocks likely to enter our portfolios

3.0 Invast launches ST24 platform


1.0 What the RBA can learn from the RBNZ

The ANZAC day long weekend has just passed and many traders are back into

full swing. Last week was somewhat of a quiet week across many Australian

trading desks and at Invast we are committed to twenty four hour service in

line with global markets and so it was business

as usual for us. Our focus this week is on the

relationship between Australia and New

Zealand. The relationship is no better

symbolised than our annual memorial which

praises and takes time to reflect the huge sacrifices the Australian and New

Zeeland Army Corps (ANZAC) took in battle. Lest we forget.

We wrote about the Reserve Bank of New Zealand (RBNZ) decision to increase

interest rates last month and while we noted the possibility of more rate rises,

we also did explicitly note that the Australian dollar was looking oversold

against the Kiwi. Since then, we have seen a rally of around 200-300 basis


points in the AUDNZD going into last week’s RBNZ meeting. Even with the

rate hike, we are somewhat surprised at the resilience of the AUD against the

NZD which at the time of writing is sitting at around 1.0767 – still around 200

basis points off its recent all-time low.

The ANZACs travelled, fought and died together in solidarity during the great

battles. The Australian economy is much larger in size but the direction of

both economies tends to mirror each other throughout the economic cycle.

New Zealand is undergoing what we think is a catch up phase – the economy

struggled to really grow at an above average pace throughout the past

decade and the rebuilding of the earthquake stricken city of Christchurch has

seen a very large spill over effect on economic growth. We think the RBNZ is

doing the right thing by increasing rates in light of higher inflation. It is the

objective of every developed economy central bank to contain inflation while

also restoring credibility. If the RBNZ did not move, the market would have

started to question its commitment towards containing inflation and that’s

when real problems start to emerge.


So what’s our point? Well we think that the Reserve Bank of Australia (RBA)

will also start to look through the valley and see that the domestic economy

is improving. Nothing frightens the RBA more than inflation and there is a

long history of over-reacting to inflation fears by the RBA under the

leadership of Governor Glenn Stevens. The RBA has many issues to consider

and the most important set of data being inflation has provided relief or at

least removed the immediacy of interest rate hikes. Last week’s quarterly

inflation printed at 0.6% vs 0.8% in Australia. The market quickly sold off the

AUD and bond yields fell sharply, particularly for short dated bonds. We think

the market might be mispricing the willingness of the RBA to move.

It wouldn’t completely surprise us if the RBA shocks the market and hikes

rates even through inflation is not an imminent problem. Economic data like

inflation readings are backward looking, the focus on the past and not

necessarily the future. The RBA knows very well the consequences of

maintaining record low interest rates in the market for too long. It will be

watching New Zealand and other neighbours and noticing things are starting


to improve. It will be focusing on the lagged impact of monetary policy which

sometimes takes 12-18 months to have its full impact work through the

market. The RBA can send a strong message by lifting rates in the order of 25

basis points that it will not wait too late until inflation becomes a problem but

won’t over react either – 2.75% is a cash rate that still remains very

accommodative.

So how do you trade this? We think a good long term trade is the AUDNZD. As

the RBA starts to move (or even on the first move) the market will realise that

the NZD rally is only very temporary and the AUD is really the regional

currency of choice. It’s the type of currency that major sovereigns will be

looking to diversify their USD and EUR exposure out of for the next few

generations. With all due respect to New Zealand, the country’s economic

growth composition is limited and lacks the diversity that Australia provides.

We see the AUDUSD going back towards the 1.20 range over the next year, it

might come quicker than many are expecting and the key trigger will be a

shock rate rise by the RBA which can catch the market by surprise.


Image: AUDNZD monthly chart via the Invast MT4 platform


We haven’t seen the 1.20 level on the AUDNZD for over a year now and our

timeframe is perhaps anywhere between six to twelve months. On the current

spot price, this represents a return of around 12.1%. The recent low on the

AUDNZD could be retested in the next few weeks, we would be putting our

stop loss at around the 1.0450 level. Even so, this represents a potential loss of

around 2.8% which means our risk to reward ratio is more than four times –

very attractive and definitely worthwhile for a medium term forex trade. The

leverage available through our platform makes the gains even larger,

depending on your own risk tolerance levels.

2.0 Stocks likely to enter our portfolios

We update our model portfolio in the first week of every month. So far we are

very pleased with the composition of our stocks, our Wealth Preservation

portfolio holds stocks like Woodside, Woolworths and Westfield Group which

have all been preforming very well lately. We do also have a list of stocks

which we have recently been scanning that are likely to perform well in the


short term. Not all of these names are in the portfolio but there are names

here that are contenders to enter. These are all quality businesses that we

think have the potential to surprise the market in term of earnings over the

next year or so and will continue to perform well, even if the market does

experience a short term pullback. We like to think of this list as a short term,

overlooked type of portfolio. Here are the names.


3.0 Invast launches ST24 platform

We don’t really mention Invast products in this publication, our focus here is

primarily trading and market opportunities. But when we launch a game

changing product, it is hard to ignore. We are very pleased to announce to our

clients that after months of product development, tweaking and endless

nights with our Headquarters in Japan we have finally launched Invast’s

proprietary ST24 trading platform into the Australian market. This is the first

time that ST24 has been launched in an English version outside of Japan.

ST24 completely changes the way many have been trading forex. Traditionally,

traders have opened up a trading platform and used their own judgement to

enter and exit a particular trade. Some traders have embraced Expert Advisors

which are essential strategies which need to be manually installed onto your

MT4 platform and then monitored individually. Invast has taken this concept

one step further and automated the implementation of forex strategies. You

now no longer have you find the right strategy and manually install it. Invast


provides thousands of forex strategist and provides them to you in an easy to

use menu style feature. What’s more important though is that unlike other

systems globally, Invast actually allows you to scan live, filter and reflect the

potential risk of holding a particular strategy. We suggest the most

appropriate margin for each strategy and display your exposure live in an

easy to read exposure gauge at the top of our myST24 trading page. See the

image below as a glimpse into the actual product. As an Invast client, you are

entitled to open an ST24 account so please speak to your account manager

about getting the ball rolling. We will start providing commentaries and

analysis on ST24 trading strategist in this publication from next month going

forward.


Stop by our site for more information about ST24 and its use.

http://www.invast.com.au/platforms/st24.aspx

http://www.invast.com.au/platforms/st24.aspx


7.0 Disclaimer

Please note that you are receiving this report complimentary from Invast Financial Services Pty Ltd (AFSL 438 283). Invast staff members may from time to time purchase securities which are included in this or future reports. The authors of this report may or may not be holding a position in the securities mentioned. Please note that the information contained in this report and Invast's website is of a general nature only, and does not take into account your personal circumstances, financial situation or needs. You are strongly recommended to seek professional advice before opening an account with us.

General Disclaimer: This newsletter contains confidential information and is intended only for the person who downloaded it. You should not disseminate, distribute or copy this newsletter. Invast does not accept liability for any errors or omissions in the contents of this newsletter which arise as a result of downloading this newsletter. This newsletter is provided for informational purposes and should not be construed as a solicitation or offer to buy or sell any financial product. Invast Financial Services Pty Ltd is regulated by ASIC (AFSL 438 283 | ABN 48 162 400 035).


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Disclosure Statement, and any other relevant Invast Financial Services Pty Ltd

documents before you decide whether or not to acquire any financial

products listed in this email. Our Financial Services Guide contains details of

our fees and charges. All these documents are available here on our website,

or you can call us on +612 8036 7555. CFDs and Foreign Exchange are

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meets your personal circumstances.

General Advice Warning: Being general advice, this newsletter does not take

account of your objectives, financial situation or needs. Before acting on this

general advice you should therefore consider the appropriateness of the

advice having regard to your situation. We recommend you obtain financial,

legal and taxation advice before making any financial investment decision.

*Distributed with the permission of Invast.com.au

Invast Launched ST24 Platform in Australia

Investor Relations

Transcript of Invast Launched ST24 Platform in Australia