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FX Heatmaps: Risk Off As Yen Surges, Euro Plunges

Tyler Durden's picture





 

The past three days of Risk On market action are all gone and forgotten, as the 250 pips of "BoJ FX intervention" have to be eliminated. As a result the USDJPY is 130 pips tighter compared to 8 hours ago, down to 84.6, and the AUDJPY and futures have followed suit. On the other end of the risk spectrum, the EUR is dropping like a rock, across every currency in the world, is testing 1.27 against the dollar, and is back down to a 1.30 handle vs the CHF. Elsewhere, Bund stops were triggered as the German bond futures hit fresh all time highs. All those who were expecting the rotation out of bonds and into stocks to begin, and bet accordingly, our condolences. Feel free to blame the BoJ.

USD

EUR

JPY

 


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Mon, 08/30/2010 - 07:55 | Link to Comment newstreet
newstreet's picture

Follow the meatball.

Mon, 08/30/2010 - 07:57 | Link to Comment TWORIVER
TWORIVER's picture

Buy the dip here, they want to see 1100 first.

Mon, 08/30/2010 - 08:04 | Link to Comment Horatio Beanblower
Horatio Beanblower's picture


A run on the Fed? 

 

Max Keiser's interview with Joern Berninger from yesterday’s On the Edge, air date 27 August 2010. {Please note – Dr. Berninger had serious audio problems on his end, so that any time he spoke for more than 30 or so seconds the sound would become inaudible, so he kept his answers very short. This is why Max spoke more than usual!}

 

http://maxkeiser.com/2010/08/28/ote70-on-the-edge-with-joern-berninger/

Mon, 08/30/2010 - 08:18 | Link to Comment MarketTruth
MarketTruth's picture

Front-running the Fed =  Easy money.

Mon, 08/30/2010 - 09:14 | Link to Comment william the bastard
william the bastard's picture

Good interview. Well the 4 total minutes that Joern had. There wasn't a serious audio issue on Joern's side., it's just that Max goes to the Dylan Rat-again school of monopolizing time-look Ma I'm on TV.

Mon, 08/30/2010 - 08:05 | Link to Comment Paper CRUSHer
Paper CRUSHer's picture

Well hell yeah Tyler. 'In the land of the falling sun' The BOJ and MOF took my advice and listened to this music track in the early hours and have therfore i'm not surprised by their actions as they acted accordingly:

http://www.youtube.com/watch?v=kQorUTqkSpY

........."yenjected with a poison.............we don't need that anymore"

Mon, 08/30/2010 - 08:08 | Link to Comment MrTrader
MrTrader's picture

Bund stops triggered ? New all time highs. Sorry, gentlemen, misinformation here. Bund high last week 134.73. Last print 134.29. Yadda, yadda, yadda.

Mon, 08/30/2010 - 08:17 | Link to Comment breezer1
Mon, 08/30/2010 - 08:19 | Link to Comment papaswamp
papaswamp's picture

Gotta love the short memory....ignore the structural problems...ride the wave ignore the hurricane generating it.

Mon, 08/30/2010 - 08:42 | Link to Comment Stormdancer
Stormdancer's picture

I desperately pray you can see that article for what it really is....

Mon, 08/30/2010 - 10:53 | Link to Comment Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Stormdancer, I hope you realize it is in denial that the gov'ts are broke and the elites are saving their own arses before the EU's collapse. The little people are suffering after years of easy living on excessive amounts of devt.

Mon, 08/30/2010 - 08:53 | Link to Comment THE DORK OF CORK
THE DORK OF CORK's picture

Silver is maintaining strength for quite some time now - it is the metal to watch in the next few weeks.

Mon, 08/30/2010 - 13:48 | Link to Comment theyenguy
theyenguy's picture

With just an hour into trading August 30, 2010. The Euro, FXE, is trading lower at 126.48; the Yen, FXY, is surging up at 116.79.

The chart of the EUR/JPY shows trading lower at 107.53; this is reflected in a falling FXE:FXY, causing European stocks FEZ to fall lower. The 200% inverse of the Euro, EUO, is trading up.

Japanese shares, EWJ, are up only 0.1%; the Bank of Japan’s loan efforts have failed to raise the market share value of EWJ.

The AUD/JPY is trading lower at 76.02; this is reflected in a falling FXA:FXY causing Billiton, BHP, to trade slightly lower.

The Mexico Peso Japanese yen carry trade, FXM:FXY, is trading lower causing Mexico, EWW, to trade lower.

Currency traders have reentered their short of the Swedish Krona-Japanese Yen carry trade, causing Sweden, EWD, to fall 2.0%. The direction in the FXS:FXY carry trade is down, taking Sweden’s shares lower. 

With the Yen, FXY, falling from 117, the world has entered competitive currency deflation. Currencies will all be tumbling lower together, albeit a different rates over time.

World stocks, ACWI, are falling lower.

Semiconductors, SMH, is off strongly this morning.  Just as there is a yield curve, which has been flattening since August 11, 2010, i.e. the 30-10 yield curve, $TYX:$TNX, going flatter, I perceive the personal computing curve which has been steepening since March of 2010 will be flattening as semiconductors falls relative to hard drives, SMH:STX.

I am expecting semiconductors to be a stock market loss leader; I see the bottom falling out of semiconductors, SMH. These started to fall heavily on August 19, 2010, and went ex-dividend on August 22, 2010. At that time they accelerated their loss compared to compared to the Russell, 2000, IWM, Banks, KBE, Basic Materials, XLB which is seen in the chart of  SMH, IWM, KBE, and XLB.

The chart of semiconductors, SMH, shows a recent bearish engulfing candlestick; then a one rally on August 27, 2010, that came by yen carry trade investing, and a sell off today.

Pablo Gorondi, of the  Associated Press writes that oil, $WTIC, falls below $75, on crude demand uncertainty and after retracing some of Friday August 27, 2010 meteoric carry trade based rise; USO fell 094%.

US Government Bonds, TLT, are  up 1.1%, recovering some of their terrific loss of August 27, 2010, when the yield curve flattened on the Federal Reserve Chairman’s announcement of a likely purchase of even more mortgage-backed securities which sent bond prices sharply lower and interest rates higher.

I believe the trend now will be both stocks AND bonds lower, with semiconductors leading stocks down; and the longer out Treasuries, TLT, experiencing more loss than the US Ten Year Note, IEF.  I believe the 30 Year to 10 Year Yield curve will be flattening even more, decimating those invested in long-term US Government bond funds such as PIMCO Long-Term US Government B, PFGBX.

Systemic risk is quite high. Liquidity evaporation could happen quite easily, resulting in a liquidity crisis, where there may not be enough buyers of investment securities to meet sellers demand. Because of this risk I am invested in Gold bullion.  I believe that out of the soon coming liquidity crisis, American Express, AXP, will be integrated with the US Treasury, through a Presidential Executive Order, or will become reconstituted as a bank, and be integrated with the Federal Reserve, and that what little lending occurs, will take place through this state corporate combine overseen by a Credit Seignior, that is a lending boss.

Confirming that the world has entered into Kondratieff Winter, the once world leading stock Exxon Mobil, XOM, fell below 60 on August 19, 2010 to trade at 59.29. It has a PE of 11.50 and a dividend of 3.0%.

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