September forex scorecard: GBP/JPY the winner, seasonal patterns miss

How did currencies score in September

Buying GBP/JPY at the start of the month yielded a hefty profit as the pair rose to 150.32 from 140.90 — nearly 10 big figures.

The big driver of that trade was a hawkish tilt from Bank of England Governor Mark Carney.

Coming up a bit later, we will take a look a the seasonal patterns for October but first, here is the scorecard for September. At the start of the month, I noted it was slim pickings for seasonal trades in September, largely because it’s such a news-heavy month.

It was tough to find some genuine winners but I sorted through the charts to try to find a bias and here’s what I came up with (and how it did).

1) Natural gas longs. I noted an upward bias in natural gas in September but it was skewed by one September in 2009. It gained as much as 4.1% but is down 1.2% now.

2) Typically a weak month for the Nikkei. This was dead wrong as all global stocks rallied, including a hefty 3.6% climb in the Nikkei 225.

3) Oil shorts. Crude is in the middle of a long stretch of seasonal weakness that continues until year-end. But the hurricanes and newsflow trumped the seasonal trend in September with an 8.8% rally.

4) I noted a slight negative bias in the Dollar index but the dollar was generally higher in the month, trailing only NZD and GBP. Again, a hawkish Fed and the passage of the debt ceiling were too much to overcome. All told though, I think the dollar should be higher than where it’s trading and maybe Sept seasonals were restraining gains.

5) I wrote that It was a decent month for the euro and it started out that way with a rally to a cycle high on Sept 8 but the tide turned later after too many months in a row of gains it skidded back to 1.1822. That’s only a minor decline on the month but it’s a decline all the same.

Overall, it was a miserable month for seasonals but, again, September is not a month where seasonals are much help.

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