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The JPYEUR Carry Trade Better Known As The Stock Market Is Back
If you were wondering what is driving all the action in the stock market again, and, as long discussed on Zero Hedge, over the past 6 months, wonder no more. Presenting today's intraday JPY-EUR pair, better known as the carry, and best known as the S&P 500. With no fundamentals driving the market to speak of, or at least all fundamentals rolling over into double dip territory, the only safe correlation is once again the carry trade.
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I love rollercoasters. I am reminded of the jerky but inexorable grinding ride up the first big "hill", then the ever so slow cresting at the top, and then, finally, when more of the coaster is on the downside versus upside, it releases and speed builds rapidly. You seem to hang mid-air, looking down at the steep drop in front of you, and then, whoosh, the fun begins. Only this time, there are a lot of folks that won't find the ride fun at all - they think that they are on a commuter train ride, not a coaster.
Quite the jump in 10 yr rates.
Y'all think it's gonna close red today. It LOOKS like it's going to close red today. It has EVERY reason to close red today. But deep down inside you know it's going to close green. Cock tease...
We may very well get another afternoon save in the last hour/half hour, but one by one, the support legs under the equities market are getting kicked out.
- Folks who bought really early in the rally may want to lock in long-term cap gains while the getting, and cap gains taxes, are good
- Any boost from end of quarter window dressing will be over soon
- Green shoots - need I say more...
- Rising interest rates - the bond market's herbicide for those pesky green shoots, along with the rest of the economy and equity markets
- A Congress and White House that, even with the EU debacle, California et al., and Dubai, still don't seem to appreciate how quickly "unsustainable" spending may become just that
- Bears rapidly becoming an endangered species, meaning lack of buying support under this market, at least of the non-governmental variety
Excepting 1929 and 1987, things generally don't top out overnight, but I think that there is a change of character taking place, and even the GS prop desk won't be able to neutralize it
Of course, I could also be completely wrong.
"Stocks trim loses on European collapse, Bofa accounting fraud, record low real estate numbers AND a Nick Bove buy recommendation".
Absolutely nothing wrong with this market.
Sing along time:
We can kill our currency better than you can.
We can kill our currency better than you.
No you can't.
Yes we can!
No you can't!
Yes we can!
Yes we can!
Yes we can!
Yes we can!
YES WE CAN!
http://www.youtube.com/watch?v=JGLnsNPQcls
"Anything you can buy I can buy cheaper.
I can buy anything cheaper than you..."
Sing it Annie!
Still, it is bass-ackwards.
Liquidity is pumping the SP500; stock market gains are driving the EUR/JPY pair.
It must be ass-backwards because you keep calling it the JPYEUR carry...and maybe that is the direction of the carry... but the pair trades as EUR/JPY.
Jus' sayin'.
it has actually been a useless risk asset indicator for a long time now
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