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Currency-Stocks Correlation Is Back As Yen Is Preferred Funding Currency Once Again
After several weeks of driftless correlation between stocks and the DXY, stocks are once again correlating almost perfectly with the critical EUR-JPY pair. Due to the acute impact on the DXY via the EUR-JPY, this is the easiest way to push around the DXY levels. Furthermore, the correlation return could be indicative that the JPY is once again the carry currency of choice. Couple this with a weakness in the short-end of the UST curve, and one can speculate that carry traders are quietly repurchashing dollar shorts and selling Bill positions, meaning that the Yen will likely be seeing rather substantial weakness in the coming weeks.
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If the greenback is not co-operative because it's going up...
I am sure glad about this.
It makes my job soooooo much easier. Follow the bouncing ball, boys.
:D
I like to follow things that bounce
All the same mkts to the down. P 3 (circle) only in the middle of the 1st inning.
The dollar isn't really going up, its just not sinking as fast as the other colored coupons. Can't we start calling it like it really is? Maybe then more people will catch on.
Anyone else been watching the USD/BRL slow march to ruin over the past two-and-a-half weeks?
A strong EUR/JPY would imply the risk trade is back on, when most stock and commodity are breaching key support levels...i think a bernanke bounce is time to get short again.
Zero hedge is my favourite taxi cabby.
http://www.breitbart.com/article.php?id=D9DGT3005&show_article=1
http://www.youtube.com/watch?v=lwKMxwKQjR4
And yeah, its all a newish conspiracy.
Once the dollar is no longer the carry trade, can't TPTB hypothetically start to slowly devalue it again? It's still beneficial to the feds to devalue it for the same reasons as last year, right?
(You can probably tell I'm not a currency guy....)
Head and shoulders top - right shoulder forming now
Picture a dam on a wide river. Downstream, a multi-wheel mechanism is installed. The number of wheels = the number of buckets per wheel. The axis of this wheel mechanism has a feedback loop to the dam gates. Each bucket has a unique starting point.
Yes, Virginia, what we got can continue 'til the river runs dry.
40muleteam borax
The invisible hand has appeared and its writing something on the wall. Let's see, I can scarcely make out the letters G..S..and J..P....M! The newly rising anti-banker crusade is merely symptomatic. The "banks" have served their purpose. After extracting last vestige of life from their host the parasitic cancerous growth is now feeding on itself in self immolation The black hole of OTC derivatives is reaching critical mass as it literally sucks the economic oxygen from the last labored gasps of its creators. The derelict flagships are listing and burning soon to sink out of sight. GS and JPM are dragging down the whole market with them. Capital runs manically around the globe from one sinking currency to another.
Bernanke Bounce ....Where?
I'm contrarian; I'm looking for a post-Greece bailout bounce for the Euro.