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FX-Risk Spread Recouples Like Clockwork
The daily EURJPY-ES decoupling is promptly becoming the most profitable trade around. As we pointed out yesterday, for the third time in as many days, the EURJPY-ES spread decoupled to a level that would generate a profitable P&L for those putting on the convergence trade. Sure enough, like clockwork, in under 24 hours, the spread has collapsed completely, and the two are once again trading on top of each other. We will continue bringing you these glaring divergences which are becoming increasingly prevalent as the traditional correlation arb players are more busy with fielding margin calls and liquidating assets than actually looking for arbitrage opportunities.
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Alright - 3 out of 3 isn't luck - it's skill. So, how do you capitalize on this? Call a broker? Press a button? Or...?
Durden 3 - Bernanke 0
Durden 3, Forman 0
http://www.theessentialsoftrading.com/Blog/index.php/2010/06/08/reaction...
Seems the correrlation has reversed in that the EURJPN is now following the ES lock step. Sell both now?
Dunno about ES and you know what they say about opinions, but I wouldn't short EURJPY this close to 108.
Unless this is 'the Big One' (you know, the big fall to end it all) and judging from the support in Asia and the HUGE support shown this session against some pretty determined selling in the EUR pairs - I'd say this isn't the Big One yet.
Me, I'm looking for another (small compared to May) short squeeze first.
Be interesting to hear other opinions.
And yes, mine are often wrong (when it comes to predictions) - I just watch the candles and take a ride now and then. So, FWIW.
This has been as Perky as Ms Drury in that white outfit......
Somebody wants their QE.
We should see EURO 1.18 real soon today
we should, but see how tight the range is today? .... must be a rational explanation for that. haha
Swiss just showed up with the cavalry!
Seem to be getting desperate.
Ya think? :-D
OK, so you're a hotshot hedge fund or IB. You gonna 1) thank your gods & demons for the rescue and leave off 'speculation'; 2) spread the word that EUR is doing fine due to united Central Bank policy; or 3) keep pushing EURCHF toward that 1.35 level knowing that the price of a huge FX/equities CB rescue is that you look REALLY serious about selling off?
The Swiss are Sisyphus. The EUR is their rock and it just keeps getting heavier.
My 0.02 Fiatscos worth: Breakdown in correlations signals significant Breakdowns in the globally coordinated bazooka response team.
Elaborate, please! Certainly: as the global depression deepens it's becoming every country for itself (that was predictable). Individual national leaders and CBs are increasingly acting unilaterally in their own interests. Take the CHF: it was not in Swiss interest to follow the European plan of hands off. JPY will go the same course. Sweaty palms all around.
Key point: As I write this Gold plunges off another near record high. I smell conspiracy!!!!!!
Swiss bank just intervened, check out CHFEUR pair
I have said it before and I'm saying it again:
BUY. GOLD. NOW.
It's the ONLY "trade".
It's not often I get to correct you, Gordon.
*TRY*. BUYING. GOLD. NOW.
http://dailyreckoning.com/gold-shortage-rumors-abound
hehehe
Further gold news flash: Physical gold sellers that just last month accepted credit cards are NO LONGER accepting them! Are the credit card companies reading ZH??? My bet is they're fearing the scenario that many here have suggested: buy physical gold on your credit card, default and you come out way ahead!
That would have been a nice "carry trade" to do. Buy gold, defalut on credit....wait is that not what the world markets are already doing.
This restriction might be aimed at credit card hackers and identity thieves. Russian gangs, for example, are into that line of work.
fuck yeah - I wish I'd thoughta that