Yen

Yen Carry Trade Snaps After 4 Week Bill Prices Deep Below Fed Funds

Moments ago the US Treasury priced its 4 Week Bill auction, which was unique in that at just $35 billion, was not only $10 billion lower than a month ago, but was the lowest since October 15. This may or may not explain why after last week's curious auction yield of 0.20%, or 5 bps below the effective Fed Funds floor, today's auction showed an even more dramatic scramble for short term liquidity, when the government sold 4 Week Bills at a rate of 0.185%, or 6.5 bps below the rate charged by the Fed!

"Risk Off" - Global Stocks Slide As Yen Surges To 17 Month High; Bund Yields Plunge

The market's slumberous levitation of the past month, in which yesterday's -0.3% drop was the second largest in 4 weeks and in which the market had gone for 15 consecutive days without a 1% S&P 500 move (in March 2015 the sasme streak ended at day 16) may be about to end, after an overnight session, the polar opposite of yesterday's smooth sailing, which has seen a sudden return of global risk off mood.

Global Stocks Rise, Europe Rebounds As Oil Halts Decline

In a quiet start to the week following last week's surprisingly strong rebound which followed a stronger than expected jobs report (perhaps to demonstrate that good news is once again good news), Japan stocks continued to sink as the USDJPY dropped to fresh lows, while commodities declined for a fifth day as the supply glut from crude to copper weighed on prices, dragging down commodity currencies. European equities rose, rebounding from a one-month low.

What SocGen Thinks Happens Next: "The Longer The Fed Feeds This Game, The Bigger The Mess Will Be"

"The Fed is increasingly worried about these ever-weaker fundamentals, yet asset markets seem more preoccupied with the omnipresence of the Fed put than downside cyclical risk. This then perhaps points to the bigger underlying concern for investors, the overwhelming build-up of leverage in the system. For in the absence of sensible drivers of returns (i.e. sensible interest rates, EPS growth etc.), investors and corporates resort to leverage.... With miserly rates of return on offer in fixed income markets, investors are leveraging up. The longer the Fed feeds this game, the bigger the mess when the inevitable downswing comes along."

Gold Money's picture

It is our mission to rebut any mainstream article that spreads misinformation about gold and/or shows a gross misunderstanding of monetary history. Matt O’Brien argues in the Washington Post that a “gold-backed dollar would have been a much more volatile one” and that “[gold]…has nothing to do with the price of food or housing.“ We show in a few simple charts why Matt O’Brien’s arguments are misguided, misinformed and just plain wrong.

Japan Stocks Plunge; Europe, U.S. Futures, Oil Lower Ahead Of Payrolls

For Japan, the post "Shanghai Summit" world is turning ugly, fast, because as a result of the sliding dollar, a key demand of China which has been delighted by the recent dovish words and actions of Janet Yellen, both Japan's and Europe's stock markets have been sacrificed at the whims of their suddenly soaring currencies. Which is why when Japanese stocks tumbled the most in 7 weeks, sinking 3.5%, to a one month low of 16,164 (after the Yen continued strengthening and the Tankan confidence index plunged to a 3 year low) it was anything but an April fool's joke to both local traders.

Gartman Throws In The Bearish Towel: "Don't Fight The Fed"

"We may think Dr. Yellen’s actions are irrational; we may see them in the end as being disastrous; we may fully expect them to come to naught and very probably they shall, but taking positions in opposition them and to her shall cause us to lose both mental and real capital. It is a fight we may win eventually, but eventually can be a very, very, very long while off into the future.... We have no actual net long or short position in equities, however." - Dennis Gartman

On Final Day Of Extremely Volatile Quarter, Futures Trade Modestly Lower

On the last day of an extremely volatile first quarter, following the latest torrid push higher in risk assets over the past two days following Yellen's dovish Tuesday comments, today has seen a modest pull back in risk, whether because the market is massively overbought, because someone finally looked at what record multiple expansion that has taken place in Q1 as earnings are set to collapse by nearly 10%, or simply due to fears that tomorrow's payrolls number will show an abnormal amount of minimum wage waiters and bartenders added.

Gartman Remains Bearish "Of Stocks"

"We are still going to err bearishly of stocks and certainly we shall not err bullishly of them. We are, in our retirement account here at TGL long of gold in EUR and Yen related terms."

Why Yellen's Speech Will Likely "Underwhelm" The Market: Deutsche Bank's Take

"If Yellen is merely trying to square off the confusion between data and recent hawkishness, she will lean on the dovish side, if only to continue the market rally. However, as Deutsche Bank adds, "if we look at the impact of past Yellen speeches on macro sensitive topics since she became Fed Chairperson, we find a typical underwhelming impact."

Futures, Oil Dip On Stronger Dollar Ahead Of "Hawkish" Yellen Speech

With Europe back from Easter break, we are seeing a modest continuation of the dollar strength witnessed every day last week, which in turn is pressuring oil and the commodity complex, and leading to some selling in US equity futures (down 0.2% to 2024) ahead of today's main event which is Janet Yellen's speech as the Economic Club of New York at 12:20pm, an event which judging by risk assets so far is expected to be far more hawkish than dovish: after all the S&P 500 is north of 2,000 for now.

Futures Rise In Thin Trading On Back Of Yen Weakness; Europe Closed

With European markets closed across the continent on Monday as the Easter holiday continues, overnight Asia was busy with China Shanghai Composite letting off some steam, and closing down 0.7% at session lows on concerns the Shanghai and Shenzhen home bubble have been popped by the politburo, Japan was a different story with the Yen sliding following a report by the Sankei newspaper that Abe will announce in May his intention to delay the planned levy hike, coupled with additional reports that Japan will unveil a major fiscal stimulus (and just on Friday Abe said he is "not thinking at all about supplemental budget" at this time).