A Stopped Out Stolper Strikes Again

While on the surface Stolper's muppet-crushing ways are far beyond ridiculous, with this latest stop out taking place in under two weeks just like his latest EURUSD humiliation, the fact that his track record is absolutely abysmal simply cements his status as the most invaluable FX "strategist" ever born.

On July 5, rising EM external funding costs, following a strong Payrolls report in the US, prompted us to express our view of EM FX vulnerability by recommending a long USD against a basket of TRY, ZAR, INR, BRL, CLP.


A combination of events has worked against our recommendation; relaxation of Fed tapering fears, unwinding of long dollar positioning and activism by EM authorities to stem depreciation pressures. As a result, at the close of London trading today, the recommended basket closed at 97.8, below the stop-loss of 98.


We continue to think that in the months ahead EM currencies, and high yielders in particular, will come under depreciation pressure. Higher external funding costs in the months ahead combined with the adjustment in accumulated external imbalances are consistent with weaker exchange rates in aforementioned countries. And we will be looking for ways to express the theme at more opportune market junctures ahead.

And we are looking forward to fading every single such "expression" at the more opportune market junctures ahead.

The speed bump formerly known as Kermit no longer cares.