See that? That’s the trade-weighted RMB index. And it’s key to FX markets in 2016 and beyond (read up). That decline is absolutely critical to the post Shanghai Accord stability. A Fed hike will turn it on its head (why do you think – besides oil prices – the Fed didn’t hike in March?) –… Keep Reading
Well, we suppose you can’t really blame them. After all, every attempt to achieve Kuroda’s elusive 2% inflation target and thus drag Japan out of the deflationary doldrums has thus far failed miserably… …so it’s only a matter of time before you have to throw in the towel or at least kick the proverbial can.… Keep Reading
Want to know what SocGen thinks about the outlook for the upcoming market landscape? Of course you do. Here’s the full diagram to consider: (Source: SocGen) Keep Reading
At the risk of sounding cold-hearted, it’s been nothing short of hilarious to watch Haruhiko Kuroda and Shinzo Abe attempt to guide the yen lower (weaker). In what may well go down in history as one of the most ill-fated policy decisions the market has ever seen, the BoJ took rates into negative territory and… Keep Reading
Ok, well the BoJ has spoken. Here’s the bullet points via Bloomberg: BANK OF JAPAN TAKES ADDITIONAL ACTION BOJ MAINTAINS POLICY BALANCE RATE AT -0.100% BOJ TO EXPAND MONETARY BASE UNTIL INFLATION STABLE ABOVE 2% BOJ TO ENHANCE FOWARD GUIDANCE BOJ TO INTRODUCE QQE WITH YIELD CURVE CONTROL BOJ SCRAPS AVG MATURITY TARGET OF JGB… Keep Reading
Think the US election doesn’t matter for asset markets? You’d certainly have every reason to make your case. After all, the most contentious and potentially history-altering election in modern history hasn’t been enough to derail the equity and bond rallies; recent long-end mini-VaR shocks notwithstanding. Uncertainty around the future for US economic policy is profound… Keep Reading
It was just a few days ago when we showed you how, once you take into account FX hedging, buying US government debt is actually not as good of an idea as it seems if you’re a Japanese investor buying safes and stashing cash to escape negative yields. As it turns out, the global USD… Keep Reading
Well this is rich (no pun intended). Bloomberg this morning ran a piece detailing UBS’ apparent plan to ramp up the hiring of quants. Now as you’re probably aware, HFT and systematic strategies (risk-parity, CTA, vol. targeting) are suspected to have exacerbated the 1,000 point flash-crashing madness that occurred in the wake of the Chinese… Keep Reading
We’re sorry to be so crass (actually we’re not, but you know, political correctness), but this has gotten ridiculous. Less than 24 hours after three Fed speakers and the threat of a Brainard speech sent the Dow tumbling nearly 400 points, we’ve now got sellside desks analyzing the same damn as-yet unarticulated speech. Folks, Brainard is… Keep Reading
We wanted you to see just how silly this regime of granular central bank/ Fed analyses has become. This is from Bloomberg, out about a half hour ago: “Odds of a Fed hike this year gyrated Friday but held mostly steady; market now shifts to Fed’s Brainard potentially clarify otherwise conflicted views of regarding pace… Keep Reading