We've been risk off since august when you look at sp500. Can't really conclude that the result has been stronger JPY, can you?
In fact, it has been all about higher yield...
Why is the GBP crashing against the USD?
- Thread starter kmiklas
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We've been risk off since august when you look at sp500. Can't really conclude that the result has been stronger JPY, can you?
In fact, it has been all about higher yield...
Yield differentials generally play out over long periods of time. The current case of Japanese yen is an extreme case. Rarely did we witness such pronounced central bank policy divergence between BOJ and other western cbs. But make no mistake, the moment equity markets start to panic and we see 3, 4 or 5% down moves in single days will be when the yen will be heavily bought. It's all relative, at the moment another safe heaven currency pays well, the US dollar. Hence the strong inflow.
Retailers need to stop looking at everything in terms of minutes, hours, or even days. That's why most lose money. They miss all the big moves for fundamental reasons and lose on the white noise and mm sharades.
Ps
What got me to respond to you was because you somewhat confirmed another post that referenced 2 days in relation to yield spreads, which is nonsense as yield differentials don't play out within such short time spans. Perhaps you did refer to something else in @SunTrader post and we are both in agreement after all.
Retailers need to stop looking at everything in terms of minutes, hours, or even days. That's why most lose money. They miss all the big moves for fundamental reasons and lose on the white noise and mm sharades.
Ps
What got me to respond to you was because you somewhat confirmed another post that referenced 2 days in relation to yield spreads, which is nonsense as yield differentials don't play out within such short time spans. Perhaps you did refer to something else in @SunTrader post and we are both in agreement after all.
I don't think it is quite as you say. It is simpler than that really. See Suntrader's posts he has it right. Your going to need dollars to buy dollar denominated assets. no more complicated than that. It's yield driven.
Indeed, thank you! And thanks to Suntrader too.
??? When was it now that we all became aware that the Fed was likely to tighten and forward guidance confirmed. Most of us, including Summers whose wrong as often as right, thought they'd press on until they'd put a good many of us out of work. I know that's what I was expecting. Now I'm not so sure they can pull that off without going full Volcker. Those old guys can be very stubborn. Hard to teach an old dog new tricks. By the way, I'm also not so sure The Feds method isn't counter productive in some environments, maybe the current one even! But the best tools are all denied to the Fed. Mosler has got me rethinking.
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Tough crowd, two days ahead of reversal.
How about the day of top (EURGBP) ? Bund 10 yr yield vs Gilt 10 yr yield:-
You seemingly have zero clue about currency markets. You would not even pass the first round for a middle or backoffice job. Strongly advice you to stay within academia. I leave it at that.
You must be arguing with yourself, I have not in the remotest alluded to a single of the points you tried to make.
this is what i wrote:
"...But yeah, in the end, yield diffs and currency values always converge, even if it takes 5 years..."
The "WHEN" is always uncertain. They can start moving together from day one, or they can stay diverged for a looooong time. I understood from your post that you disregard the relationship altogether. Seems like i was wrong about that part.