Brexit In The Driver’s Seat For Markets As “Leave” Odds Rise
“In any event, watch the BoJ tonight. USD/JPY sunk to 20-month low at 105.44 before bouncing following the Fed decision. If Japan doesn’t play this exactly right, you could see further yen strength - and we’ve seen what that does to US stocks.” That’s what we said on Thursday afternoon after the Fed struck an…
Brexit Jitters Drive More “Yen”-Sanity: Lessons From The Bloodbath In Asia
Ok, so Microsoft bought LinkedIn. If you picked up some LNKD back in February after the disastrous Q4 call, good for you. Now that we got that out of the way, let’s talk about the trends driving markets on Monday because understanding the ebb and flow here is going to be critical over the next…
An Eerie Calm Hangs Over The Dollar, One Bank Warns
Last month, in a brilliant presentation, Citi’s Matt King outlined “the polarization principle” and how it relates to politics, the economy, and markets. The idea is that as interconnectedness and correlations increase, heterogeneity naturally decreases. When that happens, the incidence of extreme outcomes in politics, society, and markets goes up. Here’s how the bank depicted…
“Yen”-sanity: Markets Swoon At The Open After Japanese Currency Soars
On Friday, I outlined how Japan’s FX Catch-22 could end up weighing on US equities. Make no mistake, it’s an important dynamic to understand. Generally speaking, risk moves opposite the yen and there’s also carry unwind when the JPY moves higher. One hot topic in Japan recently has been Prime Minister Shinzo Abe’s plan to…
Pondering A Slow Growth World: Have We Entered A New Era?
If the leaders of the world’s advanced economies are very concerned about global growth, then Japanese Prime Minister Shinzo Abe is very, very, very concerned (so that’s three “verys” for Abe versus one “very” for everyone else). To be sure, part of the reason Abe seems to be on the verge of a meltdown when…
A Yen War Looms After Contentious Weekend In Japan
There’s probably no one in the world who wants the Fed to raise rates more than Japanese Finance Minister Taro Aso. Earlier this month, Aso threatened to intervene in the FX market if the yen continued to trade in a “disorderly, one-sided, speculative” manner. For those who haven’t followed the story, this is a big…