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Dollar Dislocating From Stocks, YEN-EUR Carry In Lockstep With S&P
As the dollar picks up steam intraday, HFTs take over market action (it is a low volume day after all) after the two trading in lockstep early in the morning. The complete lack of market logic is somehow completely not surprising.
And while the DXY is higher, the only thing pushing stocks in any direction is the YEN-EUR trade now and every day for the past 3 weeks, yet the carry trade impact on DXY is lost due to GBP and other currency noise.
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FX just got ahead of itself momentarily, that's all.
so, i love all the talk about traders returning from vacation.
what volumes? what traders? Sam from Sheepshead Bay and Joe from Brooklyn? WTF?
maybe the computers are up to 80%+ on volume?
One possible answer to this question is that the big players are waiting for something else altogether, something that we don't know about yet. But that's pure speculation.
I guess you missed the interview on CNBS this morning explaining
that lots of market people treat today as a traditional snooze day and
stay home.
I'm dumbfounded however as to why this wasn't explained to us last
week by this same channel.
CNBS, all the news we should have told you last week but didn't.
It's like one big echo chamber at the studios day after day. After a while, they begin to believe their own propaganda.
Sometime we are to close to the markets...
Is it ever logical. Certainly not without human interaction.
My logic, Dollar/Gold both completing reversal days
the yen has to strengthen a little bit more :-)
Please Mr. Durden, give me the SPY vs. USD Yen
Chart! Looks very interesting, I tried
in the office but the bloomberg to be honest
is not my home base...
try this
http://stockcharts.com/h-sc/ui?s=$ONE:$XJY&p=W&yr=3&mn=0&dy=0&id=p36506822810
&
http://stockcharts.com/h-sc/ui?s=$XEU:$XJY&p=W&yr=3&mn=0&dy=0&id=p27608382775
note yield curve in lower box
http://img43.imageshack.us/img43/9950/1207v.png
someone smart said that next trigger for a big move is currency. DXY is free falling. is this THE TRIGGER?
http://www.federalreserve.gov/releases/g19/Current/
Consumer credit drops by ~24 Billion dollars from June to July, down about 10% yoy
Yes drop was 6 times greater than forecast and the prior report was revised to show that credit dropped 50% more than was reported last time
Scary: we're going from less worser to more worser. How will they spin this?
No credit?
Bad credit?
No problem!
Eat cake!
May and June revised significantly lower as well
DOES NOT IMPACT THE MARKETS BECAUSE THE MARKETS ARE TOTALLY 100% PURE FARCE
Nothing matters so long as the banksters/fed control everything. Not a fucking thing. Prices move according to their script.
Next stop: Pitchfork Rebellion
dead bodies on the ground could decompose and grow GREEN SHOOTS though! buy any rebellion!
Can somebody here explain the euro-yen carry trade?I can understand if that will lift european shares,but why the s&p?thanx in advance
I cannot explain it, I can only testify to its all-importance.
I imagine it has something to do with a G20 stock-propping program that involves currency swaps ....or something.
the main takeaway is that the markets are 1) controlled, and 2) total fucking bullshit
The big carry trade used to be euro-yen and usd-yen.
But at the end, the yen was the carry for everything.
But since the FED throws money around like we
are seeing now, the USD became a carry currency
as well. So this complicates things a little bit in the
forex markets. But the question is which trade is
the biggest right now, and I believe that the yen
carry is huge. The other question is who wins the
race to Zero. The Japanese or the US Central bank.
anything new from Bob Janjuah???????????
The dollar broke .78 on the USDX. Apparently, no one noticed. Or cares.
Butter up those dollars because they is toast.
I am Chumbawamba.
support is 77.5 in the US Dollar Index, then we could
drop 3 %, but support is support, and we just
have to look at price behavior, when it gets hit.
Too many dollar bears. The year end trend only starts in October and my bet is dollar rally, equity drop.
Sorry but that is not an explanation. I am the one who asked the question about explaining the carry trade. And the reason I said I can understand the other side of the trade is because roughly,you borrow the low interest low currency,and invest it in the high interest rate(or in high risk asset) currency. So for example:if you can borrow at bank rate JPY and invest it in German bonds,at the same time hedging yourself by buying futures JPY,then you locked in on the rate differential . But what dose not make sense is the s&p getting higher because of that. After all the yen is getting higher against the dollar.
why complain about the manipulation? They do the same ramp job just about every day at 2:30. Buy 5 SPY calls for a buck a piece at at 2:25 every day and sell them the next day the open and pocket an easy 50/100 bucks.
Obama delivers a big speech tomorrow, mkt will close green. count on it
Its very simple, the carry trade is a vehicle for the creation of new money via bond monetization and other forms of debt. Hence open positions that are in the money and yielding income provide margin to pyramid equities where you can also try and squeeze a nice capital gain. Hence money flows into equities. When the EUJY positions become less profitable i.e. the Yen the traders are short of gets stronger, then they have to sell stocks to control their risk or cover their margin. Naturally they could cover their Yen but then they'd lose their position and earning power. Of course a carry trade collapse followed by an equity collapse would mean the dollar carry trade would be under pressure as well, so things could be about to get interesting. These things rarely unwind according to a normal distribution.