by Ashraf Laidi Posted: Dec 3, 2013 15:11 Comments: 0 View Media
This thread was started in response to the Media:
Ashraf Laidi on CNBC - November 29, 2013
The central bank with the clearest forward guidance has had the weaker currency because it has the greater set of policy options by which to keep interest rates low. The interview illustrates the cases of the Fed, BoE and ECB.
During yesterday's sleepy markets, I highlighted in this tweet the rally in bund futures (rising prices, falling yields) may signal similar price action at the subsequent session, when US bond yields/prices return from Memorial Day Weekend. Today's bond price action did not disappoint, as the homogenous asset class moved in concert, delivering gap ups in prices and falling yields. This was a desperately needed development for yen bulls (particularly USDJPY shorts). Interpret what you wish from the chart below as to which is the dependent and independent variable (USDJPY or yield spread). Who leads whom? Shorting USDJPY has been the "pain trade" for our WhatsApp Broadcast Group, as we await Wednesday's debt ceiling vote and the JOLTs survey. Hanging in there.