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Today's Instrument Of Choice For Pushing Stocks Around: The Euro-Yen Trade
Which, of course, leads to a weaker dollar, as Zero Hedge has previously highlighted.
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Is this just correlation, or is there causality? Thanks.
Nothing impacts the broads and copper&oil like the wiggles in euro/yen. In fact, if you were to say that the only thing that affects moves in the SPX is the moves in euro/yen, you would be correct enough to get an A, because NOTHING else comes close. My conclusion is that the central banks have been manipulating all markets, and their interventions involve currency swaps.
We saw the same shit during the nonsensical stock market rally in 07, when every wiggle in the yen/dollar correlated with a wiggle in the SPX. And yes, now, as then, it is causal.
The central banksters are diabolical creeps.
Absolutely correct. The net made of interwoven trade-weighted currencies is held on all sides by CB's of those currencies. It takes teamwork to keep all the bodies jumping from the burning building from hitting the ground with a splat!
40muleteam borax
amen to that
<remaining content removed by Sacrilege>
Back to basics.
1) Prices are determined by currency / money supply chasing the same amount of goods.
2) Currency supply is mostly controlled by credit creation / destruction
3) Japan is the most levered economy
4) Japan deleverages = less yen = higher price of yen
5) Japan releverages = more yen = drop price of yen
Massive yen rally = massive deleveraging = massive deflation
Might want to check nzd/jpy. Looks quite a bit more highly correlated than eur/yen. Particularly point correlations, where peaks and valleys are all moving in the correct direction at the same time. They are probably 10-15x's more common in nzd/jpy than in eur/jpy.
Besides the past couple days what the NZD/JPY is capturing is the "risk-on" "risk-off" trade. As that has been the operative frame for the market the past couple months, it makes sense it would be highly correlated with the markets. When risk pushers feel giddy they bid up the NZD, scared the JPY. The JPY and USD used to both be flight to safety trades, now its just the JPY which is leaving the USD in the dust.
i like aud/jpy better for corelation
what is with gold? it is sky rocketing.
Short gold around 960 has been a one way trade for quite a while now. Looks like someone panicked.
A $25 move this morning. And only $20 from $1000. I'd expect ZH to have a feature article on this by now. Tyler, you have many fans that are gold bugs. Give us a gold article so we can all talk about how shiny it is.
It has been coiling around the HFT coral bit too long and it finally ran out of space between the coils. They can compress the spread but they can't reverse it. LOL
This was happening pre-crisis with the gbp/jpy etc
being massively bid on carry trades. 'Risk on', 'risk off' is exactly what it is.
Every asset is correlated on the day to it's risk assessor of choice and may skew with specific fundamentals- i.e. oil.
It's not a mystical dollar assault.
Look at AUD crosses.
Virtually every asset is being gamed by the same robots, all pre-wired and circuit-cabled to lead up river to Col. Kurtz at Skynet.
That's why SPY follows EUR/USD exactly.
That's why crude follows SPY exactly.
That's why the dollar and bonds trade inverse to SPY and oil, exactly.
Its all a big synchronized swimming event.
Col. Blankfein: "Just Get Me Up River!!!"
+1
In the 2009 breast off, MCC brings her game today. And a t-shirt sent to her from traders who support HFT. T-shirt amusingly states "unfair advantage".
God I love women like you!!!!
Luckily I married one.
Unless, of course, it's GBP Sterling - up, up and awaaay...
"bonds trade inverse to SPY ."
ROBO, I believe for some of the fixed income asset classes it's natural to trade inverse to S&P. Especially when money is going from low risk to higher risk asset classes.
If bonds break their insane correlation with S&P, it's rather a good development. Unless by bonds you meant corporate issues, those would be correlated to S&P unless there is huge expectations of rate increase.
Anyway, it's early so i might be a bit off. Spotted two new day traders in the office nearby, now i have someone to give a lecture too. :)
Or hear a lecture to that matter. :)
Future trading is the new black in LA.
p.s. My investment horizon is .5 to 2 years, there is only so much stress I am willing to take, lol
My friend and 'Comrade' --
probably not the place and I don't mean to thread crap, but I'm in LA as well. daystructure ' @ ' gmail please
Now that the FED has squeezed all the shorts, now they are dealing flatout sales volume. As stated at Zero before, 30x selling over buying insiders.
One tool they have ultimate control over(and helps Goldman cover their cheap borrowing from the FED)is smashing the dollar day and day after day. Just pouring dollars out into a big blackhole.
So, Gold is shooting to the moon again, knowing the the CBs have no intention of allowing the dollar to strengthen.
As an aside, our national currency is now officially being debased by a non-accountable NGE, the IMF:
http://www.imf.org/external/np/tre/sdr/proposal/2009/0709.htm
A general allocation of Special Drawing Rights (SDRs) equivalent to US$250 billion became effective on August 28, 2009. The allocation is designed to provide liquidity to the global economic system by supplementing the Fund’s member countries’ foreign exchange reserves.
The general SDR allocation was made to IMF members that are participants in the Special Drawing Rights Department (currently all 186 members) in proportion to their existing quotas in the Fund, which are based broadly on their relative size in the global economy.
Separately, the Fourth Amendment to the IMF Articles of Agreement providing for a special one-time allocation of SDRs entered into force on August 10, 2009. The special allocation will be made to IMF members on September 9, 2009. The total of SDRs created under the special allocation would amount to SDR 21.5 billion (about US$33 billion; see column 3 in the table below).
Anyone have COT data changes on gold? If short positions are lining up this just may be a bulltrap to get the longs in and then kapow-a full on dumping.
Or possibly a distraction to keep the run to the dollar minimalized.
LAst year, gold was tossed with everything else as the race to the dollar grew. If Goldman or JP know gold is getting trashed in near future, they can easily benefit from a flight to quality and then a beheading.
Delevering and deflation is a BITCH and a HALF folks.
Anyone have COT data changes on gold? If short positions are lining up this just may be a bulltrap to get the longs in and then kapow-a full on dumping.
Or possibly a distraction to keep the run to the dollar minimalized.
LAst year, gold was tossed with everything else as the race to the dollar grew. If Goldman or JP know gold is getting trashed in near future, they can easily benefit from a flight to quality and then a beheading.
Delevering and deflation is a BITCH and a HALF folks.