Compare text

Find the difference between two text files

Real-time diff

Unified diff

Collapse lines

Highlight change

Syntax highlighting

Tools

fx:macro Summary Changes 2023_01_21

Created about a year agoDiff never expires

33 removals

123 lines

41 additions

131 lines

"14.01.23

"21.02.23

***** MACRO *****

>>BULL<<

▶︎ The China opening is happening, and while its effects may take time to play out they eventually will

▶︎ COT positioning in NQ futures is bullish

▶︎ Copper is performing

▶︎ Credit spreads seem more or less contained, the Corporate Bond Market Distress Index is lower

▶︎ Credit spreads seem contained, the Corporate Bond Market Distress Index is lower

▶︎ No signs of stress from equity volatility and options

▶︎ Market breadth is looking pretty decent

▶︎ Constructive price action in key sectors: bullish Comm/Tech vs. bearish Utilities

>>BEAR<<

▶︎ Short-term: correlation between ES and VIX is high which is a warning sign for a top in equities

▶︎ Short-term: correlation between ES-VVIX and VIX-VVIX is high which is a warning sign for a top in equities

▶︎ Global and Asian PMIs are weakening further (notable exception: India)

▶︎ Energy futures are still lagging the China trade

▶︎ US treasuries have started to perform: it still looks like a trade on a Fed pivot with treasuries rising when everything else is but it could quickly become a play on softer growth

▶︎ Six out of eight G8 2s10s have so far inverted

▶︎ Fear & Greed is at Greed (but far from extremes)

>>SUMMARY<<

The market feels slightly more bullish than last week overall, breadth is improving, volatility has come down with VIX below 20, metals performing, energy catching up, and so on. I'm still not going to commit to a bias, though, because I find the whole situation very unclear.

The market continues to improve, the bullish COT positioning in NQ surprised me, breadth is doing well, price action in key sectors looks good, and so on. On a longer timeframe, we still have QT going on, there's no Fed pivot and we've seen how quickly things can get out of hand last year.

***** USD *****

>>BULL<<

▶︎ The economy is resilient, it's still growing and the labour market is showing no sign of softening

>>BEAR<<

▶︎ 25 bps for February are priced in: it's still a hike but it looks dovish, and Fed speakers haven't been helping here

▶︎ A lot of dovish comments (at least perceived that way) from the Fed before the blackout period, FedWatch decidedly more dovish too

▶︎ The implied Fed Funds Rates for next year are tanking

▶︎ Inflation and inflation breakevens are trending lower while real yields are going nowhere

▶︎ CESI for the G10 has been improving for months now... this doesn't square with the Dollar Smile at all

▶︎ CESI for the G10 has been improving for months now, and US CESI is now falling: this doesn't square with the Dollar Smile at all

▶︎ CSII continues to go down

▶︎ The China reopening should be bearish USD

▶︎ PMIs have been disappointing

▶︎ Treasuries have bullish COT positioning which could weigh on yields (pared back a bit this week, though)

▶︎ Treasuries have bullish COT positioning which could weigh on yields

▶︎ The market is still very long USD (according to PAIN) or at least not extremely short (according to COT)

>>SUMMARY<<

Last week I wrote that having taken a break feels good because it allows for a fresh look at things, and I think that's what I needed to do with the dollar: my medium-term long bias was mostly based on the dollar smile with weaker global growth and the US outperforming. That's just not what's been happening over the last few months (see the G10 CESI and China reopening). I'm removing the medium-term bias.

The fundamentals are bearish and the market is still positioned too long. The China reopening, the hawkish turn from the BOJ, the ECB that will continue to hike are all pointing to a lower dollar. But: DXY hasn't gone anywhere this week when there were good catalysts for a move lower.

***** EUR *****

>>BULL<<

▶︎ Hawkish ECB Minutes this week

▶︎ The ECB looks comparatively hawkish, and they will likely continue hiking while the Fed (and others) pause

▶︎ Bear flattening in 2s10s continues

▶︎ Fragmentation risks seem to be either contained or the market isn't caring about them for now

▶︎ BTP-Bund has made a lower low this week

▶︎ The mild winter has completely soothed fears of an energy shortage

▶︎ CESI is going strong

▶︎ PMIs have been surprising to the upside and have been less bad than feared

▶︎ Stock markets are outperforming

▶︎ Seasonality is bullish

▶︎ Bearish sentiment

>>BEAR<<

▶︎ Positioning is at bearish extremes

▶︎ It's not profiting as much from the weak dollar as expected

▶︎ Not sure what it would take for the Ukraine war to spook the market again: Belarus attacking, another mobilization... not sure but it's still a relevant risk

>>SUMMARY<<

Same as last week: A lot more bullish arguments than bearish ones. The extreme in positioning has me a bit worried, and I wouldn't want to be long on a higher timeframe because of it but for short-term trades I'm looking to play it from the long side.

Same as the last two weeks: A lot more bullish arguments than bearish ones. The extreme in positioning has me a bit worried, and I wouldn't want to be long on a higher timeframe because of it but for short-term trades I'm looking to play it from the long side.

***** GBP *****

>>BULL<<

▶︎ A bit of hawkish BoE-speak this week

▶︎ CPI and Earnings surprised to the upside this week

▶︎ Another batch of data this week that surprised to the upside

▶︎ It was (once again) the strongest currency this week

>>BEAR<<

▶︎ The inherent strength it has shown for the last few months seems to be weaker

▶︎ The economic outlook is bleak, they expect to be in a recession for the entire year

▶︎ The entire country seems to be in disarray with everyone on strike and people being squeezed

▶︎ Dovish central bank with two dissenters at the last meeting

▶︎ CESI has rolled over and is heading lower

▶︎ CESI is clearly lagging its Eurozone counterpart

▶︎ Weaker on the PMI heatmap

▶︎ Even if its 2s and 10s look decent, they aren't driving it at the moment (negative correlation)

>>SUMMARY<<

It feels like 2022 happens all over again: the fundamentals are bad but it's just looking through all of that and trades higher. The correlations with ES and VIX make it look like a risk-on/risk-off currency, so I have to take that into account.

Last week I wrote that it feels like 2022 again where GBP just went up despite all the bad data. Well, it's clearly happening again (admittedly, we've had upside surprises in that data), so I'm moving the bias to neutral. It's still fairly correlated to ES (and inversely to VIX), so it remains a risk on/risk off play.

***** AUD *****

>>BULL<<

▶︎ CPI upside surprise this week

▶︎ It has started to perform somewhat... not sure why now when it did so poorly over the last months: Chinese reopening finally catching on?

▶︎ OECD CLI has it outperforming

>>BEAR<<

▶︎ Bad labour market report this week, taking pressure off the RBA after the CPI beat the week before

▶︎ Weaker PMIs for Australia and most of Asia

>>SUMMARY<<

The stronger CPI seemed significant at first but the RBA has looked through a print like that before, so I'm not putting too much weight on it. AUD has been trading better than expected but I don't feel like that's enough to change the bias.

There's been nothing that would make me change the bias. It's uncorrelated to its 2s, its 10s and its 2s10s, so it's pretty much doing its own thing. Will watch Iron Ore and Gold more because of the high correlation (0.72 and 0.74 over 30 days).

***** NZD *****

>>BULL<<

▶︎ The China reopening should be positive for NZD with tourism catching a bid

▶︎ It's showing inherent strength

▶︎ The China reopening should be positive for NZD with tourism catching a bid (note the Visitor Arrivals this week that were completely looked through, though)

▶︎ The RBNZ is decidedly more hawkish than the neighbouring RBA

>>BEAR<<

▶︎ Positioning is bearish

▶︎ CESI has rolled over

>>SUMMARY<<

I'm changing the bias to neutral: it's underperforming AUD, the China trade seems to be over already for NZD, and the economic data has weakened. My model indicates a short bias for NZD, and it would make sense because AUD and NZD have been virtually uncorrelated for a while, but I'm not a machine so I'll treat them as equals for now.

We've had a stellar Visitor Arrivals number this week but NZD hasn't reacted at all, Business Confidence and the Manufacturing PMI were both bad, yet NZD is the strongest currency for the week. The drivers clearly aren't economic data at the moment.

***** CAD *****

>>BULL<<

▶︎ CPI surprised to the upside this week (Median and Trimmed)

▶︎ CESI is going higher

▶︎ Positioning is bullish

▶︎ 25-delta risk reversal seeing it stronger

>>BEAR<<

▶︎ The BOC has practically announced the end of their hiking cycle

▶︎ It's inherently weak

>>SUMMARY<<

The economy is doing okay, the last two CPI prints mostly surprised to the upside, so I wonder whether my assessment of the BOC being dovish might turn out to be wrong, especially since CAD looks pretty oversold and vulnerable to a hawkish surprise. Still not enthusiastic about it since it hangs on the USD.

The last three CPI prints mostly surprised to the upside, and there's a decent chance the BOC could put in a 50 bps hike, which would make it look pretty hawkish compared to the neighbouring Fed. At this point, I see more upside than downside but I'm not changing the bias because it would essentially be a bet on the rate decision next week.

***** CHF *****

>>BULL<<

▶︎ PMI still green on the heatmap

▶︎ Sentiment is bearish (listed that on the wrong side last week)

▶︎ Sentiment is bearish CHF, i.e. a bullish factor

>>BEAR<<

▶︎ Its performance is still mediocre-to-bad

▶︎ CESI is glued to its floor

▶︎ Last inflation print was deflationary and surprised to the downside, CSII is falling

>>SUMMARY<<

Unchanged from last week: It's not a heartfelt short because of the high correlation to EUR (about 0.6 over 100 days) but then it hasn't been as strong as I had expected it to be for months last year. It has a relevant negative correlation to the ES of about -0.5, so I'll treat it as risk-on/off mostly.

It feels a bit like the opposite of GBP: it ""should"" have been stronger than it was, and I have to admit that my understanding of it just isn't very good at the moment. Its correlation profile suggests to trade it as a risk on/risk off proxy, so that's what I'm left with.

***** JPY *****

>>BULL<<

▶︎ More hawkish news from the BOJ (about a review of the side-effects of their easy policy)

▶︎ JPY has been trading a fair bit stronger than expected in the wake of the dovish BOJ meeting this week

▶︎ The latest BOJ decision was an unexpected and hawkish surprise despite the verbal pushback

▶︎ It seems clear that the BOJ is slowly steering towards some form of exit from their strict easing

▶︎ Widening of the YCC band looks like a first step, yield differentials are narrowing

▶︎ The nomination process for the succession of Kuroda will take off shortly, the market seems to be taking it as hawkish

▶︎ The nomination process for the succession of Kuroda will take off in a few weeks, the market seems to be taking it as hawkish

▶︎ Positioning still has a pretty long way to go until it ""normalizes""

▶︎ Inflation has been surprising to the upside (not showing up in the CSII, though)

▶︎ OECD CLI outperformer

>>BEAR<<

▶︎ Short-term could see some unwinding of longs that had hoped for another tweak in YCC policy

▶︎ The 10y yield has backed off the new 0.5% upper bound

▶︎ A lot of jawboning from Kuroda, so another change in policy before his term ends looks unlikely

▶︎ Still the most dovish central bank out there

▶︎ Bullish sentiment

>>SUMMARY<<

I don't know enough about the JGB market to make an educated guess whether the BOJ will make a back-to-back change to their policy next week. But it's what the market is trading at the moment, and it feels as if everyone is a bit too excited. Also, the move is getting extended even though positioning-wise there's still quite a way to go until things normalize. It's still a long because that's the way of least resistance until the BOJ rate statement in my view."

The long remains because the policy normalization has been merely pushed back to a later date. Shorter-term could see some more weakness after the disappointing BOJ meeting."

Saved diffs

Original text

Open file

"14.01.23
***** MACRO *****
     >>BULL<<
▶︎ The China opening is happening, and while its effects may take time to play out they eventually will
▶︎ Copper is performing
▶︎ Credit spreads seem more or less contained, the Corporate Bond Market Distress Index is lower
▶︎ No signs of stress from equity volatility and options
▶︎ Market breadth is looking pretty decent
     >>BEAR<<
▶︎ Short-term: correlation between ES and VIX is high which is a warning sign for a top in equities
▶︎ Global and Asian PMIs are weakening further (notable exception: India)
▶︎ Energy futures are still lagging the China trade
▶︎ US treasuries have started to perform: it still looks like a trade on a Fed pivot with treasuries rising when everything else is but it could quickly become a play on softer growth
▶︎ Six out of eight G8 2s10s have so far inverted
▶︎ Fear & Greed is at Greed (but far from extremes)
     >>SUMMARY<<
The market feels slightly more bullish than last week overall, breadth is improving, volatility has come down with VIX below 20, metals performing, energy catching up, and so on. I'm still not going to commit to a bias, though, because I find the whole situation very unclear. 

***** USD *****
     >>BULL<<
▶︎ The economy is resilient, it's still growing and the labour market is showing no sign of softening
     >>BEAR<<
▶︎ 25 bps for February are priced in: it's still a hike but it looks dovish, and Fed speakers haven't been helping here
▶︎ Inflation and inflation breakevens are trending lower while real yields are going nowhere
▶︎ CESI for the G10 has been improving for months now... this doesn't square with the Dollar Smile at all
▶︎ CSII continues to go down
▶︎ The China reopening should be bearish USD
▶︎ PMIs have been disappointing
▶︎ Treasuries have bullish COT positioning which could weigh on yields (pared back a bit this week, though)
▶︎ The market is still very long USD (according to PAIN) or at least not extremely short (according to COT)
     >>SUMMARY<<
Last week I wrote that having taken a break feels good because it allows for a fresh look at things, and I think that's what I needed to do with the dollar: my medium-term long bias was mostly based on the dollar smile with weaker global growth and the US outperforming. That's just not what's been happening over the last few months (see the G10 CESI and China reopening). I'm removing the medium-term bias.

***** EUR *****
     >>BULL<<
▶︎ The ECB looks comparatively hawkish, and they will likely continue hiking while the Fed (and others) pause
▶︎ Bear flattening in 2s10s continues
▶︎ Fragmentation risks seem to be either contained or the market isn't caring about them for now
▶︎ The mild winter has completely soothed fears of an energy shortage
▶︎ CESI is going strong
▶︎ PMIs have been surprising to the upside and have been less bad than feared
▶︎ Stock markets are outperforming
▶︎ Seasonality is bullish
     >>BEAR<<
▶︎ Positioning is at bearish extremes
▶︎ It's not profiting as much from the weak dollar as expected
▶︎ Not sure what it would take for the Ukraine war to spook the market again: Belarus attacking, another mobilization... not sure but it's still a relevant risk

     >>SUMMARY<<
Same as last week: A lot more bullish arguments than bearish ones. The extreme in positioning has me a bit worried, and I wouldn't want to be long on a higher timeframe because of it but for short-term trades I'm looking to play it from the long side.

***** GBP *****
     >>BULL<<
▶︎ A bit of hawkish BoE-speak this week
▶︎ Another batch of data this week that surprised to the upside
     >>BEAR<<
▶︎ The inherent strength it has shown for the last few months seems to be weaker
▶︎ The economic outlook is bleak, they expect to be in a recession for the entire year
▶︎ The entire country seems to be in disarray with everyone on strike and people being squeezed 
▶︎ Dovish central bank with two dissenters at the last meeting
▶︎ CESI has rolled over and is heading lower
▶︎ Weaker on the PMI heatmap
▶︎ Even if its 2s and 10s look decent, they aren't driving it at the moment (negative correlation)
     >>SUMMARY<<
It feels like 2022 happens all over again: the fundamentals are bad but it's just looking through all of that and trades higher.  The correlations with ES and VIX make it look like a risk-on/risk-off currency, so I have to take that into account.

***** AUD *****
     >>BULL<<
▶︎ CPI upside surprise this week
▶︎ It has started to perform somewhat... not sure why now when it did so poorly over the last months: Chinese reopening finally catching on?
▶︎ OECD CLI has it outperforming

     >>BEAR<<
▶︎ Weaker PMIs for Australia and most of Asia
     >>SUMMARY<<
The stronger CPI seemed significant at first but the RBA has looked through a print like that before, so I'm not putting too much weight on it. AUD has been trading better than expected but I don't feel like that's enough to change the bias.

***** NZD *****
     >>BULL<<
▶︎ The China reopening should be positive for NZD with tourism catching a bid
▶︎ The RBNZ is decidedly more hawkish than the neighbouring RBA
     >>BEAR<<
▶︎ Positioning is bearish
▶︎ CESI has rolled over
     >>SUMMARY<<
I'm changing the bias to neutral: it's underperforming AUD, the China trade seems to be over already for NZD, and the economic data has weakened. My model indicates a short bias for NZD, and it would make sense because AUD and NZD have been virtually uncorrelated for a while, but I'm not a machine so I'll treat them as equals for now.

***** CAD *****
     >>BULL<<
▶︎ CESI is going higher
▶︎ Positioning is bullish
▶︎ 25-delta risk reversal seeing it stronger
     >>BEAR<<
▶︎ The BOC has practically announced the end of their hiking cycle
▶︎ It's inherently weak
     >>SUMMARY<<
The economy is doing okay, the last two CPI prints mostly surprised to the upside, so I wonder whether my assessment of the BOC being dovish might turn out to be wrong, especially since CAD looks pretty oversold and vulnerable to a hawkish surprise. Still not enthusiastic about it since it hangs on the USD.

***** CHF *****
     >>BULL<<
▶︎ PMI still green on the heatmap
▶︎ Sentiment is bearish (listed that on the wrong side last week)
     >>BEAR<<
▶︎ Its performance is still mediocre-to-bad
▶︎ CESI is glued to its floor
▶︎ Last inflation print was deflationary and surprised to the downside, CSII is falling
     >>SUMMARY<<
Unchanged from last week: It's not a heartfelt short because of the high correlation to EUR (about 0.6 over 100 days) but then it hasn't been as strong as I had expected it to be for months last year. It has a relevant negative correlation to the ES of about -0.5, so I'll treat it as risk-on/off mostly.	

***** JPY *****
     >>BULL<<
▶︎ More hawkish news from the BOJ (about a review of the side-effects of their easy policy)
▶︎ The latest BOJ decision was an unexpected and hawkish surprise despite the verbal pushback
▶︎ Widening of the YCC band looks like a first step, yield differentials are narrowing
▶︎ The nomination process for the succession of Kuroda will take off in a few weeks, the market seems to be taking it as hawkish
▶︎ Positioning still has a pretty long way to go until it ""normalizes""
▶︎ Inflation has been surprising to the upside (not showing up in the CSII, though)
▶︎ OECD CLI outperformer
     >>BEAR<<
▶︎ Still the most dovish central bank out there
▶︎ Bullish sentiment
     >>SUMMARY<<
I don't know enough about the JGB market to make an educated guess whether the BOJ will make a back-to-back change to their policy next week. But it's what the market is trading at the moment, and it feels as if everyone is a bit too excited. Also, the move is getting extended even though positioning-wise there's still quite a way to go until things normalize. It's still a long because that's the way of least resistance until the BOJ rate statement in my view."

Changed text

Open file

"21.02.23
***** MACRO *****
     >>BULL<<
▶︎ The China opening is happening, and while its effects may take time to play out they eventually will
▶︎ COT positioning in NQ futures is bullish
▶︎ Copper is performing
▶︎ Credit spreads seem contained, the Corporate Bond Market Distress Index is lower
▶︎ No signs of stress from equity volatility and options
▶︎ Market breadth is looking pretty decent
▶︎ Constructive price action in key sectors: bullish Comm/Tech vs. bearish Utilities
     >>BEAR<<
▶︎ Short-term: correlation between ES-VVIX and VIX-VVIX is high which is a warning sign for a top in equities
▶︎ Global and Asian PMIs are weakening further (notable exception: India)
▶︎ US treasuries have started to perform: it still looks like a trade on a Fed pivot with treasuries rising when everything else is but it could quickly become a play on softer growth
▶︎ Six out of eight G8 2s10s have so far inverted
▶︎ Fear & Greed is at Greed (but far from extremes)
     >>SUMMARY<<
The market continues to improve, the bullish COT positioning in NQ surprised me, breadth is doing well, price action in key sectors looks good, and so on. On a longer timeframe, we still have QT going on, there's no Fed pivot and we've seen how quickly things can get out of hand last year.

***** USD *****
     >>BULL<<
▶︎ The economy is resilient, it's still growing and the labour market is showing no sign of softening
     >>BEAR<<
▶︎ A lot of dovish comments (at least perceived that way) from the Fed before the blackout period, FedWatch decidedly more dovish too
▶︎ The implied Fed Funds Rates for next year are tanking
▶︎ Inflation and inflation breakevens are trending lower while real yields are going nowhere
▶︎ CESI for the G10 has been improving for months now, and US CESI is now falling: this doesn't square with the Dollar Smile at all
▶︎ CSII continues to go down
▶︎ The China reopening should be bearish USD
▶︎ PMIs have been disappointing
▶︎ Treasuries have bullish COT positioning which could weigh on yields
▶︎ The market is still very long USD (according to PAIN) or at least not extremely short (according to COT)
     >>SUMMARY<<
The fundamentals are bearish and the market is still positioned too long. The China reopening, the hawkish turn from the BOJ, the ECB that will continue to hike are all pointing to a lower dollar. But: DXY hasn't gone anywhere this week when there were good catalysts for a move lower.

***** EUR *****
     >>BULL<<
▶︎ Hawkish ECB Minutes this week
▶︎ The ECB looks comparatively hawkish, and they will likely continue hiking while the Fed (and others) pause
▶︎ Bear flattening in 2s10s continues
▶︎ BTP-Bund has made a lower low this week
▶︎ The mild winter has completely soothed fears of an energy shortage
▶︎ CESI is going strong
▶︎ PMIs have been surprising to the upside and have been less bad than feared
▶︎ Stock markets are outperforming
▶︎ Seasonality is bullish
▶︎ Bearish sentiment
     >>BEAR<<
▶︎ Positioning is at bearish extremes
▶︎ It's not profiting as much from the weak dollar as expected
▶︎ Not sure what it would take for the Ukraine war to spook the market again: Belarus attacking, another mobilization... not sure but it's still a relevant risk

     >>SUMMARY<<
Same as the last two weeks: A lot more bullish arguments than bearish ones. The extreme in positioning has me a bit worried, and I wouldn't want to be long on a higher timeframe because of it but for short-term trades I'm looking to play it from the long side.        

***** GBP *****
     >>BULL<<
▶︎ CPI and Earnings surprised to the upside this week
▶︎ It was (once again) the strongest currency this week
     >>BEAR<<
▶︎ The economic outlook is bleak, they expect to be in a recession for the entire year
▶︎ The entire country seems to be in disarray with everyone on strike and people being squeezed 
▶︎ Dovish central bank with two dissenters at the last meeting
▶︎ CESI is clearly lagging its Eurozone counterpart
▶︎ Weaker on the PMI heatmap
▶︎ Even if its 2s and 10s look decent, they aren't driving it at the moment (negative correlation)
     >>SUMMARY<<
Last week I wrote that it feels like 2022 again where GBP just went up despite all the bad data. Well, it's clearly happening again (admittedly, we've had upside surprises in that data), so I'm moving the bias to neutral. It's still fairly correlated to ES (and inversely to VIX), so it remains a risk on/risk off play.

***** AUD *****
     >>BULL<<
▶︎ It has started to perform somewhat... not sure why now when it did so poorly over the last months: Chinese reopening finally catching on?
▶︎ OECD CLI has it outperforming

     >>BEAR<<
▶︎ Bad labour market report this week, taking pressure off the RBA after the CPI beat the week before
▶︎ Weaker PMIs for Australia and most of Asia

     >>SUMMARY<<
There's been nothing that would make me change the bias. It's uncorrelated to its 2s, its 10s and its 2s10s, so it's pretty much doing its own thing. Will watch Iron Ore and Gold more because of the high correlation (0.72 and 0.74 over 30 days).

***** NZD *****
     >>BULL<<
▶︎ It's showing inherent strength
▶︎ The China reopening should be positive for NZD with tourism catching a bid (note the Visitor Arrivals this week that were completely looked through, though)
▶︎ The RBNZ is decidedly more hawkish than the neighbouring RBA
     >>BEAR<<
▶︎ Positioning is bearish
▶︎ CESI has rolled over
     >>SUMMARY<<
We've had a stellar Visitor Arrivals number this week but NZD hasn't reacted at all, Business Confidence and the Manufacturing PMI were both bad, yet NZD is the strongest currency for the week. The drivers clearly aren't economic data at the moment.

***** CAD *****
     >>BULL<<
▶︎ CPI surprised to the upside this week (Median and Trimmed)
▶︎ CESI is going higher
▶︎ Positioning is bullish
▶︎ 25-delta risk reversal seeing it stronger
     >>BEAR<<
▶︎ The BOC has practically announced the end of their hiking cycle
▶︎ It's inherently weak
     >>SUMMARY<<
The last three CPI prints mostly surprised to the upside, and there's a decent chance the BOC could put in a 50 bps hike, which would make it look pretty hawkish compared to the neighbouring Fed. At this point, I see more upside than downside but I'm not changing the bias because it would essentially be a bet on the rate decision next week.

***** CHF *****
     >>BULL<<
▶︎ PMI still green on the heatmap
▶︎ Sentiment is bearish CHF, i.e. a bullish factor
     >>BEAR<<
▶︎ Its performance is still mediocre-to-bad
▶︎ CESI is glued to its floor
▶︎ Last inflation print was deflationary and surprised to the downside, CSII is falling
     >>SUMMARY<<
It feels a bit like the opposite of GBP: it ""should"" have been stronger than it was, and I have to admit that my understanding of it just isn't very good at the moment. Its correlation profile suggests to trade it as a risk on/risk off proxy, so that's what I'm left with.

***** JPY *****
     >>BULL<<
▶︎ JPY has been trading a fair bit stronger than expected in the wake of the dovish BOJ meeting this week
▶︎ It seems clear that the BOJ is slowly steering towards some form of exit from their strict easing
▶︎ The nomination process for the succession of Kuroda will take off shortly, the market seems to be taking it as hawkish
▶︎ Positioning still has a pretty long way to go until it ""normalizes""
▶︎ Inflation has been surprising to the upside (not showing up in the CSII, though)
▶︎ OECD CLI outperformer
     >>BEAR<<
▶︎ Short-term could see some unwinding of longs that had hoped for another tweak in YCC policy
▶︎ The 10y yield has backed off the new 0.5% upper bound
▶︎ A lot of jawboning from Kuroda, so another change in policy before his term ends looks unlikely
▶︎ Still the most dovish central bank out there
▶︎ Bullish sentiment
     >>SUMMARY<<
The long remains because the policy normalization has been merely pushed back to a later date. Shorter-term could see some more weakness after the disappointing BOJ meeting."