Seasonal trends this month
1) Not a great time Down Under
August has been a tough month for the Australian dollar. Since 2005, it's only risen against the dollar twice and fallen 11 times. The average decline over the past decade is 2.19% making it the second worst month and only fractionally better than May.
AUD has been struggling even as the Canadian dollar bounces and worries about Chinese trade are mounting. Technically, the pair has been consolidating near the lows for the past two months.
2) Gold and oil diverge
A strong or weak dollar can wreak havoc on commodities but fundamentals ultimately win out. Gold has had a tough year but since 2000, August has been the second-best month for gold. Oil, meanwhile, is in the midst of a second-half seasonal slump that extends through year-end. I think a good separate trade on oil is to fade any spikes on hurricanes, because so much production has moved onshore.
3) Quiet but volatile
August is a month for vacations and Europe is essentially shut down. That means less news but it also means less liquidity. As a result, volatility tends to come in August and there has been a habit of jumps in the VIX. Whether that's a seasonal pattern or a collection of one-offs is debatable but with risks around trade, the yuan, NAFTA and the overall complacency in markets (the VIX is at 13) a jump at some time this month is a good bet.
4) Cable weakness
August is the worst month on the calendar for cable with declines in 9 of the past 11 years. A big BOE decision is coming up in the day ahead and that will set the stage for what comes next.
Other ideas.
August and September are the only months where Bitcoin has averaged declines
It's the worst month for the German DAX
It's the worst month for natural gas in the longer term, but that's less true in the past 5 years
It's the worst month for the Nikkei 225
It's the worst month for the kiwi
