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Intraday Major Yen Divergence; Parallel Derisking In Process
While the logic of how a US economy equates to a weaker dollar escapes those who think before pushing buttons and chasing trends, a glance at intraday currency performance indicate a substantial divergence in then Yen relative to the global "short-dollar" complex. Even as the euro, cable and OZ are powering higher, the yen has been caught in a weak zone, and has been declining all day long despite a stronger than expected US economy (yes, it does make sense...but don't think about it too hard).
The oddity in the FX market is compounded when juxtaposed with Japan CDS levels: as of several minutes ago, Japan CDS was trading around 63 (white line on the chart below): a level last seen in April. This begs the question: what does someone know about Japan, and will this weakness translate into weaknesses for other non-US currencies?
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Excellent Observation & Analysis. Charts Continue To Suggest That Longer Term The "DXY" Likely Re-Tests The Sub $72 "All Time Lows". Might Todays Yen Divergence Be A Near Term Signal That That "Test" Occurs Sooner Than Later? Thank You ZeroHedge For The Continued Good Work!
Posted By @ChartingStock
Interesting chart...what I've noticed is that the Yen has been losing some steam since the early October but the BP has gained some steam. Looks like the Euro is gaining against the dollar-if GDP is so strong than that should have made the dollar stronger today, not weaker.
To me, it seems as if the GDP was mostly "full of hot air".
TD once posted a link to a sight where one can get quotes for cds. Is it possible that somebody post it again?
DTCC Website.
http://www.dtcc.com/products/derivserv/data/index.php
Good luck interpretting it.
Is it an attempt to restart the yen carry trade?
Hey Tyler, where have you been? Every time "risk appetite" has increased (meaning stocks ramp up) over the last 2 years, the perfect correlation has been for the EUR/USD to and JPY/USD to rise also. The Yen has been considered a safe-heaven (de-leveraging) play just as the USD but even more so.
zeno
Which is probably why, in the thousand or so posts Tyler has made on the subject, he refers to the correlation in stocks and EUR/JPY.
So this stops the USD short squeeze (if that's what it was) dead in its tracks?
Hedge fund legend Paul Tudor Jones joined Einhorn, Paulson in race to gold, as a defense against rogue central bankers, especially of the Anglo Saxon kind
http://www.fundmymutualfund.com/2009/10/paul-tudor-jones-3rd-quarter-inv...
In regard to the article on Paul Tudor Jones;
Personally, I have doubts about ETF's whose primary metals custodian banks are large Bullion Banks, which have very often been in very large short positions on the COMEX for the metals for which they are the "custodian's". I also find enough ambiguity in the prospectus to keep me up at night.
If the Hedge Funds want to see the price of gold go anywhere where it would naturally be without all the intervention and super massive concentrated short positions by the Bullion banks, they need to purchase physical gold and hold it and keep taking it off the markets and until it over powers the paper (derivatives) markets ability to manipulate it. To me, investing in the these primary precious metals ETFs will not achieve this goal.
Here is an interesting post that helps explain these movements. Ironically, it was published yesterday:
http://fiateconomics.com/?p=1495
Here is an interesting post that helps explain these movements. Ironically, it was published yesterday:
http://fiateconomics.com/?p=1495
Hey, all is good. Fannie and Freddie up 10-12% today!
Everyone is back up testing that resistance, which was previously support.
May we live in interesting times.
So we have a bear squeeze in equities and a carry trade that's starting to perspire? I'm all choked up. Really.
Not a trader of JPN sov CDS but a keen observer of the markets and I will say liquidity is poor compared to most Sovs...JPN Itraxx gaps around in 10% daily ranges so this Sov move needs to be taken in context. That said, combined with selling in JGB's of late I think there is something to watch there.
You are seeing dead people bloke.... if you are such a keen observer you would realise that Japan sov CDS trades with a 5bp bid/offer. Couple that with your only insight that it is illiquid (USA trades more frequently) and you have the case where one motivated buyer could shove the sov market 10bp wider on say a 40m flow. To try and draw any inference from that move with what is a global move higher in interest rates is pretty lazy.