Global Macro Trading Journal

Quote from ralph00:
Japan has a big bureaucracy. Any big policy change regarding the yen has to be cleared by the BOJ, MOF, the PM's office - all with god knows how many committees and bureaus.

It could be that only a far lower level of dollar/yen will force action - something ridiculous like ¥60.

Companies always complain, but I'm not convinced they're getting killed at ¥76. The trade surplus is still large. The "strong" yen has been an issue for ages. Anybody looking to move offshore has already done it. As for the consumer, Japan isn't like Switzerland, where folks can just drive over the border to shop. They're still relatively captive to domestic business.
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Sure, all valid points... I'll add when USDJPY is at 60 then :).
 
Was having a debate on global macro last night with several other traders and I'm still having the same outlook. My $0.02:

Generally I still believe we're replaying the 70s, whether this is 74' or 78' is anyone's guess. I'm with ralph here on the stance that things aren't as bad as they seem. This is not a 1931 or even a 37'. This means long equities for the long term (5 yrs +), generally long commodities (including PMs). I see plenty of whipsaws but the macro fundamentals remain the same.

Low rates = money flood behind the dam of cautious credit that is trickling now but will eventually burst into the global economy. We are seeing some organic growth in NA compared to EU and China, these are the best equities to be long. I ran a scan for companies with low P/Es, low/no debt and low P/FCF, large cash amounts and I had a 1974 Buffett moment.

No outlook on bonds or currencies globally, other than prepare for news and to be whipsawed. Equities and commodities are not as prone to some CB going nuts.
 
Quote from Martinghoul:

I like it for 3 reasons:

1) I believe that the downside is bounded, since, even now, the strength of the yen is difficult for Japan to deal with. If we go much further, the BoJ/MoF hand might be forced and they will be compelled to act in a meaningful way. If they don't, the impact of the strong ccy on the economy should eventually make itself known. Moreover, I don't like the long-term fundamentals.

2) The levels are extreme here and I do believe that exchange and interest rates exhibit mean-reversion over long horizons. I don't expect a massive regime shift (see above).

3) Carry is nice and positive and I am a carry munky.

I don't have it on in massive size (it's smth like 20% the size of my short CHF position), but I do plan to add if it goes in my face.

Would be great to hear your (and everyone else's, obviously) thoughts.
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God bless the BOJ.
 
Quote from Martinghoul:

Boom boom.
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I reduced my long usdjpy position by half early Asia morning and used that to short AUD. I was hoping to buy usdjpy back around 75.2 or so......missed half the gains....:(

As a consolation, made at least 30% of what I would have made on usdjpy on aud short.

LONG LIVE THE BOJ - sorry for caps :)
 
I couldn't resist it and took my NOKJPY off. Will add when it goes back to exciting levels. In a way, with trades like that, I would sort of like them to bumble along and not work for a while, so that I can take the carry. Obviously, with the expectation that it eventually does work.
 
Quote from Martinghoul:
I couldn't resist it and took my NOKJPY off. Will add when it goes back to exciting levels. In a way, with trades like that, I would sort of like them to bumble along and not work for a while, so that I can take the carry. Obviously, with the expectation that it eventually does work.
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Normally, I'm really sh1t at timing these things, but I did nail this one. Even though I do say so myself.
 
Quote from Martinghoul:

Normally, I'm really sh1t at timing these things, but I did nail this one. Even though I do say so myself.
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Indeed, your timing was great. You should Treat yourself!
 
Quote from gmst:
Indeed, your timing was great. You should Treat yourself!
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Ha, I know better... Just means that next time I will do the exact opposite and lose myself money. Always works like this for me.
 
Quote from Martinghoul:

I couldn't resist it and took my NOKJPY off. Will add when it goes back to exciting levels. In a way, with trades like that, I would sort of like them to bumble along and not work for a while, so that I can take the carry. Obviously, with the expectation that it eventually does work.
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I exited all of my long USD/JPY position last night as well. Moving on to something else for now. That was the windfall I've been hoping for with these long USD/JPY pot shots for the past couple of weeks. I was beginning to feel some heat until BOJ bailed me out. It will be very interesting to see where we go from here.
 
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