Global Macro Trading Journal

"The Dow ended down 236.17 at 11257.55, its lowest close since October 7."

Wait what happened to the "8th best October in the Dow's history" non-sense propaganda?
 
Random musings:

If we don't test the upper end of this year's trading range in the next few weeks, only political action/stimulus will keep SPX from cracking 1075 set in the summer. And EUR/USD to 1.2 at the least. You can probably knock 10 handles off AUD and CAD as well.

I would say the biggest tell is gold, it has held up so far since early 09 due to the monetary easing, if it breaks much lower here, the specter of 08 raises it's head. NA equities should outperform Europe though.
 
Quote from Martinghoul:

This is incorrect. There is nothing in the current law that prevents the ECB from making unsterilized purchases of EU member countries government bonds in the secondary market. It's allowed within their monetary policy transmission framework.
More...

Doesn't the inflation mandate prevent that?
 
Quote from jj90:

Random musings:

If we don't test the upper end of this year's trading range in the next few weeks, only political action/stimulus will keep SPX from cracking 1075 set in the summer. And EUR/USD to 1.2 at the least. You can probably knock 10 handles off AUD and CAD as well.

I would say the biggest tell is gold, it has held up so far since early 09 due to the monetary easing, if it breaks much lower here, the specter of 08 raises it's head. NA equities should outperform Europe though.
More...

why is AUD and CAD on the same boat vis-a-vis USD in Armagedon scenario? the commodity argument never made much sense to me....
 
How many of you caught last nights JGB selloff? (Yes, I did :-))
Seemed a low risk play after yesterday's monster Bund puke...you could sell 143.04-07 at the TSE open, and since then you've have had ten consecutive red bars on the hourly.

In one day we erased all the gains since November 2nd...

Not that it was actually that big a move in a historical context, 50 tick swings used to be commonplace in the good ol days.

Whether it's the start of a bigger move, who knows? But at least the JGB dealers have been woken up, so hopefully we'll get some more action (in both directions) from now on.

Oh yes - the funnymentals?
Some story from S&P, "closer to a sovereign downgrading of Japan"
 
Quote from benwm:

How many of you caught last nights JGB selloff? (Yes, I did :-))
Seemed a low risk play after yesterday's monster Bund puke...you could sell 143.04-07 at the TSE open, and since then you've have had ten consecutive red bars on the hourly.

In one day we erased all the gains since November 2nd...

Not that it was actually that big a move in a historical context, 50 tick swings used to be commonplace in the good ol days.

Whether it's the start of a bigger move, who knows? But at least the JGB dealers have been woken up, so hopefully we'll get some more action (in both directions) from now on.

Oh yes - the funnymentals?
Some story from S&P, "closer to a sovereign downgrading of Japan"
More...

This Bloomberg page
http://www.bloomberg.com/apps/quote?ticker=GJGBBNCH:IND

shows very little movement - is the data wrong?

Because looking at the chart the price gains (yield declines) since November 2nd are still there.
 
Japan was downgraded how many times between 1998 and 2002? Too lazy to pull up the charts but I believe it paid to buy the dips during the period.

Of course at some point it's going to be different but until then the JGB bears remind me of the gold bears: they see this big chart of something that has gone up relentlessly for a decade or two and argue it simply has to go down, starting today.
 
Quote from Butterball:

Japan was downgraded how many times between 1998 and 2002? Too lazy to pull up the charts but I believe it paid to buy the dips during the period.

Of course at some point it's going to be different but until then the JGB bears remind me of the gold bears: they see this big chart of something that has gone up relentlessly for a decade or two and argue it simply has to go down, starting today.
More...

The thing that I find interesting is that the pace of
(1) JPY appreciation and (2) JGB yield decline
has decreased in recent months, which suggests that the reversal that "Japan bears" have been waiting for may be near.

I'll be patient and wait for a JGB 10-year yield of 1.35% before selling JPY.
 
Quote from m22au:

This Bloomberg page
http://www.bloomberg.com/apps/quote?ticker=GJGBBNCH:IND

shows very little movement - is the data wrong?

Because looking at the chart the price gains (yield declines) since November 2nd are still there.
More...

I only trade JGB futures not JGBs these days, and the futures dropped to lowest price since Nov-1.

1% yield for 10yr JGB looks about right, so it seems there was around a 5bp rise in yields if Bloomberg (indicative?) data is correct.

10yr JGB futures basically represent a 7yr maturity (because cheapest to deliver bond is 7yr) and they dropped in price from 143.07 at TSE open to 142.53. I haven't checked for a while but 8 ticks on JGB futures used to be around 1 bp change in CTD yield, so the futures increased ~7bp in yield equivalent.

The 10yr bond will not move in perfect lockstep with the (7yr) futures - it looks like there was some 7-10 yr curve flatenning.
 
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