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fx:macro Summary changes 2023_01_07

Created about a year agoDiff never expires

83 removals

121 lines

75 additions

114 lines

"10.12.22

"07.01.23

***** MACRO *****

>>BULL<<

▶︎ GDP growth is picking up, inflation is coming down: goldilocks again

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

▶︎ Asian markets performing on China reopening

▶︎ Copper is performing

▶︎ FX volatility is declining, equity volatility is low and various volatility indexes aren't showing any stress

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

▶︎ Breadth is still bullish

▶︎ No signs of stress from equity volatility and options

▶︎ TD Ameritrade IMX is near lows

▶︎ Seasonality is bullish for equities

▶︎ Metals have been performing

>>BEAR<<

▶︎ Longer-term treasuries have started to perform: bad news for risk assets if this goes on

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

▶︎ Credit spreads are still at/near/above recent highs

▶︎ Energy futures are just very weak

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

▶︎ 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

▶︎ The global economy continues to weaken but some Asian PMIs have started to improve

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

▶︎ CL isn't buying the China reopening story

>>SUMMARY<<

It's been three weeks since I published my last macro assessment, and if I go through it all, things have either remained stable or they have improved: the China reopening does have some meat on the bones, markets reflect that (copper, Asian stock indexes) but euphoria is pretty much contained (crude oil, US equities). So, I'll keep a short-term bullish bias into year-end while the overall bearish macro conditions remain in place.

Having taken a bit of a break from the markets is good because I can take a fresh look.

It feels like the overall macro situation is even more unclear now, and things aren't fitting together well enough for me to formulate a bias. There are good arguments for a soft landing (of the economy and the stock market) but also for the complete opposite. Let's not forget the chaos of a few months ago: I find it hard to believe that we've had the UK financial system almost go belly-up and we're out of the woods today. My plan for now is: watching carefully, reducing risk as much as possible and continuing to buy cheap tail hedges in case things go south.

***** USD *****

>>BULL<<

▶︎ GDP growth in Q4 picking up and so far shows no sign of coming down (GDPNow)

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

▶︎ The labour market remains strong... for now it's a soft landing

▶︎ The global economy is still slowing and the US is still outperforming, which should both be good for the dollar

▶︎ Slowing global growth (PMIs getting worse globally, Fidelity Business Cycles)

>>BEAR<<

▶︎ Messaging from the Fed has been dovish in relation to the easing financial conditions

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

▶︎ Inflation breakevens coming down, CSII is heading lower

▶︎ CSII continues to go down

▶︎ The China reopening is happening

▶︎ USD hasn't rallied on a bear flattener and it could now be bull steepening

▶︎ Real yields haven't moved higher for a while

▶︎ Market-implied meeting probabilities shifted more dovish

▶︎ COT positioning in treasuries is bullish

▶︎ The China reopening should be bearish USD

▶︎ Bearish seasonality

▶︎ PMIs have been disappointing

▶︎ Treasuries have bullish COT positioning which could weigh on yields

>>SUMMARY<<

I don't have a firm view on the dollar going into this week with FOMC on Wednesday, but: everyone seems to expect a lot of hawkishness and Powell didn't deliver that last week when he clearly could have. Once again: we've entered the Fed blackout on dovish footing and it feels like Wednesday will see more dollar weakness. Short-term, the China reopening story will also weigh on the dollar, and depending on how that goes, I'll have to reassess my medium-term view.

The bearish arguments seem to have stacked up quite a bit over the last weeks. I still think there's a case for a medium-term long with the global economy slowing and the US outperforming on a relative basis. For short-term trades I'm still looking to short it because of the Fed pause, inflation coming down, positive China headlines etc.

***** EUR *****

>>BULL<<

▶︎ The ECB is starting to look relatively hawkish compared to the Fed, BoE, BOC, RBA, BOJ

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

▶︎ Yields are performing, especially the short end (central bank)

▶︎ The front-end of the yield curve is holding up well

▶︎ European stock markets are outperforming

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

▶︎ CESI still going higher, PMIs have gone from very bad to bad

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

▶︎ No reaction from EUR to energy, weather or Russia in a while

▶︎ 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<<

▶︎ COT positioning is bearish

▶︎ Positioning is at bearish extremes

▶︎ 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<<

The tailwinds clearly outweigh the headwinds especially if dollar weakness goes on.

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<<

▶︎ Inherent strength

▶︎ CESI remains fairly resilient

>>BEAR<<

▶︎ Very dovish central bank despite a few hawkish comments this week and last

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

▶︎ Depressing economic outlook

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

▶︎ Worst OECD CLI among G8

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

▶︎ PMIs have weakened

▶︎ Dovish central bank with two dissenters at the last meeting

▶︎ Bearish seasonality

▶︎ 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's tough to reconcile my macro assessment (which is clearly bearish) with the reality of GBP trading well. I'm changing my bias to neutral but that's just an acknowledgement of it being stronger than expected and me not understanding it well enough.

I feel very biased because I don't have a single bullish argument for the sterling here. But it is what it is.

***** AUD *****

>>BULL<<

▶︎ The RBA wasn't hawkish, but at least it wasn't outright dovish 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?

▶︎ One of the few PMI outperformers

▶︎ OECD CLI has it outperforming (but data is from October)

▶︎ Relative outperformer in the OECD CLI

▶︎ CSII is up

>>BEAR<<

▶︎ AUD performance has been horrible in light of the Chinese reopening news

▶︎ Weaker PMIs for Australia and most of Asia

▶︎ PMIs in Asia deteriorating further, China is a drag on AUD

▶︎ Seasonality is bearish

>>SUMMARY<<

AUD has performed badly on the China pivot (as has crude oil) and the RBA isn't helping, so it's tough to imagine it much higher. Will leave it at neutral.

Hard to say what to make of it... its strength feels fake in light of how it traded last year but then the China reopening would be a fitting narrative. It has the second-highest correlation to ES, so I'll treat it as a pure risk-on/risk-off proxy for now.

***** NZD *****

>>BULL<<

▶︎ Inherent strength on all timeframes

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

▶︎ Incoming data has improved

▶︎ The RBNZ is decidedly more hawkish than the neighbouring RBA

▶︎ PMI outperformer

▶︎ Yield curve bear flattener

▶︎ Bearish sentiment

>>BEAR<<

▶︎ Divergence between increasing Aussie trade balance and stagnant/falling Kiwi trade balance

▶︎ Positioning is bearish

>>SUMMARY<<

Unchanged from three weeks ago: The outperformance vs. AUD continues, it seems to benefit from the Chinese headlines way more than AUD. Add the comparatively hawkish RBNZ and it's a long bias.

It has traded the China reopening much better than AUD, the RBNZ is still hawkish but going through the last weeks of econ data it feels fundamentally weaker than before. Still, I maintain a long bias... which doesn't mean I'll be looking at AUDNZD short automatically (even if that may sound illogical).

***** CAD *****

>>BULL<<

▶︎ CESI has picked up from lows

▶︎ CESI is going higher

▶︎ Small improvement in PMIs

▶︎ Positioning is bullish

▶︎ COT positioning is at a bullish extreme

▶︎ 25-delta risk reversal seeing it stronger

▶︎ Housing market remains strong

▶︎ Bearish sentiment

▶︎ 25-delta risk reversal is seeing it higher

>>BEAR<<

▶︎ The BOC have effectively ended the hiking cycle

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

▶︎ It's been underperforming massively

▶︎ It's inherently weak

▶︎ Energy is underperforming and the correlation CAD vs. CL is still positive

>>SUMMARY<<

Still no good arguments to change the outlook from bearish to neutral: the BOC are now the most dovish central bank next to the BOJ, and crude oil is the laggard in the China story (together with AUD). Positioning in CAD being bullish, and short CAD being the trade for next year somewhere every other day are the only two things going for it.

The short in CAD looks like a move a lot of people expected for 2023 but that has already occured and now positioning is already at a bullish extreme. The underlying fundamentals are still weak and the BOC is still dovish but it doesn't feel good to short it after how much it tanked in just a few weeks.

***** CHF *****

>>BULL<<

▶︎ PMI still holding up (one of the few that's still green on the map)

▶︎ PMI still green on the heatmap

▶︎ Extremely bearish sentiment, especially USDCHF and EURCHF

>>BEAR<<

▶︎ CSII ticking lower

▶︎ Its performance is still mediocre-to-bad

▶︎ CESI isn't picking up

▶︎ CESI is glued to its floor

▶︎ Inflation has disappointed, taking pressure off the SNB

▶︎ Positioning at bearish extremes

▶︎ Sentiment is bearish

>>SUMMARY<<

CAD hasn't worked for me in a while, maybe it's the new funding currency of choice with the second-lowest interest rates next to JPY, but I don't know. As previously, I'll only trade it as a risk-on/risk-off proxy.

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<<

▶︎ Inflation surprises have picked up, the tone of the talk from policymakers has also shifted subtly

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

▶︎ Treasury yields have tanked

▶︎ Widening of the YCC band looks like a first step

▶︎ Relative outperformer in the OECD CLI

▶︎ 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 is still very bullish (I don't really know why I hadn't included that over the last weeks, just look at COT)

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

▶︎ OECD CLI outperformer

>>BEAR<<

▶︎ The divergence between the BOJ and every other central bank isn't getting any smaller

▶︎ Still the most dovish central bank out there

>>SUMMARY<<

With the JPY being driven by US yields, I don't have a firm view on it either going into this week. Overall, my bias is slightly long with treasuries trading the way they are but my conviction is too low to change it in the sidebar."

It doesn't feel like the YCC change has been priced in completely: USDJPY is now only 5% lower than it was before the BOJ meeting, the upcoming changes in BOJ leadership and the talks/rumours around it are probably more hawkish than dovish. Add the way US yields trade and the bullish positioning in USTs, and it's a long for the yen."

Saved diffs

Original text

Open file

"10.12.22
***** MACRO *****
     >>BULL<<
▶︎ GDP growth is picking up, inflation is coming down: goldilocks again
▶︎ Asian markets performing on China reopening
▶︎ FX volatility is declining, equity volatility is low and various volatility indexes aren't showing any stress
▶︎ Breadth is still bullish
▶︎ TD Ameritrade IMX is near lows
▶︎ Seasonality is bullish for equities
▶︎ Metals have been performing
     >>BEAR<<
▶︎ Longer-term treasuries have started to perform: bad news for risk assets if this goes on
▶︎ Credit spreads are still at/near/above recent highs
▶︎ Six out of eight G8 2s10s yield curves have inverted so far
▶︎ The global economy continues to weaken but some Asian PMIs have started to improve
▶︎ CL isn't buying the China reopening story
     >>SUMMARY<<
It's been three weeks since I published my last macro assessment, and if I go through it all, things have either remained stable or they have improved: the China reopening does have some meat on the bones, markets reflect that (copper, Asian stock indexes) but euphoria is pretty much contained (crude oil, US equities). So, I'll keep a short-term bullish bias into year-end while the overall bearish macro conditions remain in place.

***** USD *****
     >>BULL<<
▶︎ GDP growth in Q4 picking up and so far shows no sign of coming down (GDPNow)
▶︎ The labour market remains strong... for now it's a soft landing
▶︎ Slowing global growth (PMIs getting worse globally, Fidelity Business Cycles)
     >>BEAR<<
▶︎ Messaging from the Fed has been dovish in relation to the easing financial conditions
▶︎ Inflation breakevens coming down, CSII is heading lower
▶︎ The China reopening is happening
▶︎ Real yields haven't moved higher for a while
▶︎ COT positioning in treasuries is bullish
▶︎ Bearish seasonality
     >>SUMMARY<<
I don't have a firm view on the dollar going into this week with FOMC on Wednesday, but: everyone seems to expect a lot of hawkishness and Powell didn't deliver that last week when he clearly could have. Once again: we've entered the Fed blackout on dovish footing and it feels like Wednesday will see more dollar weakness. Short-term, the China reopening story will also weigh on the dollar, and depending on how that goes, I'll have to reassess my medium-term view.

***** EUR *****
     >>BULL<<
▶︎ The ECB is starting to look relatively hawkish compared to the Fed, BoE, BOC, RBA, BOJ
▶︎ Yields are performing, especially the short end (central bank)
▶︎ European stock markets are outperforming
▶︎ CESI still going higher, PMIs have gone from very bad to bad
▶︎ No reaction from EUR to energy, weather or Russia in a while
     >>BEAR<<
▶︎ COT positioning is bearish
     >>SUMMARY<<
The tailwinds clearly outweigh the headwinds especially if dollar weakness goes on.

***** GBP *****
     >>BULL<<
▶︎ Inherent strength
▶︎ CESI remains fairly resilient

     >>BEAR<<
▶︎ Very dovish central bank despite a few hawkish comments this week and last
▶︎ Depressing economic outlook
▶︎ Worst OECD CLI among G8
▶︎ PMIs have weakened
▶︎ Bearish seasonality
     >>SUMMARY<<
It's tough to reconcile my macro assessment (which is clearly bearish) with the reality of GBP trading well. I'm changing my bias to neutral but that's just an acknowledgement of it being stronger than expected and me not understanding it well enough.

***** AUD *****
     >>BULL<<
▶︎ The RBA wasn't hawkish, but at least it wasn't outright dovish this week
▶︎ One of the few PMI outperformers
▶︎ Relative outperformer in the OECD CLI
▶︎ CSII is up
     >>BEAR<<
▶︎ AUD performance has been horrible in light of the Chinese reopening news
▶︎ PMIs in Asia deteriorating further, China is a drag on AUD
▶︎ Seasonality is bearish

     >>SUMMARY<<
AUD has performed badly on the China pivot (as has crude oil) and the RBA isn't helping, so it's tough to imagine it much higher. Will leave it at neutral.

***** NZD *****
     >>BULL<<
▶︎ Inherent strength on all timeframes
▶︎ Incoming data has improved
▶︎ PMI outperformer
▶︎ Yield curve bear flattener
▶︎ Bearish sentiment
     >>BEAR<<
▶︎ Divergence between increasing Aussie trade balance and stagnant/falling Kiwi trade balance
     >>SUMMARY<<
Unchanged from three weeks ago: The outperformance vs. AUD continues, it seems to benefit from the Chinese headlines way more than AUD. Add the comparatively hawkish RBNZ and it's a long bias.

***** CAD *****
     >>BULL<<
▶︎ CESI has picked up from lows
▶︎ Small improvement in PMIs
▶︎ COT positioning is at a bullish extreme
▶︎ Housing market remains strong
▶︎ Bearish sentiment
▶︎ 25-delta risk reversal is seeing it higher
     >>BEAR<<
▶︎ The BOC have effectively ended the hiking cycle
▶︎ It's been underperforming massively
     >>SUMMARY<<
Still no good arguments to change the outlook from bearish to neutral: the BOC are now the most dovish central bank next to the BOJ, and crude oil is the laggard in the China story (together with AUD). Positioning in CAD being bullish, and short CAD being the trade for next year somewhere every other day are the only two things going for it.

***** CHF *****
     >>BULL<<
▶︎ PMI still holding up (one of the few that's still green on the map)
▶︎ Extremely bearish sentiment, especially USDCHF and EURCHF
     >>BEAR<<
▶︎ CSII ticking lower
▶︎ CESI isn't picking up

     >>SUMMARY<<
CAD hasn't worked for me in a while, maybe it's the new funding currency of choice with the second-lowest interest rates next to JPY, but I don't know. As previously, I'll only trade it as a risk-on/risk-off proxy.

***** JPY *****
     >>BULL<<
▶︎ Inflation surprises have picked up, the tone of the talk from policymakers has also shifted subtly
▶︎ Treasury yields have tanked
▶︎ Relative outperformer in the OECD CLI
▶︎ Positioning is still very bullish (I don't really know why I hadn't included that over the last weeks, just look at COT)
     >>BEAR<<
▶︎ The divergence between the BOJ and every other central bank isn't getting any smaller
     >>SUMMARY<<
With the JPY being driven by US yields, I don't have a firm view on it either going into this week. Overall, my bias is slightly long with treasuries trading the way they are but my conviction is too low to change it in the sidebar."

Changed text

Open file

"07.01.23
***** 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
     >>BEAR<<
▶︎ Global and Asian PMIs are weakening further (notable exception: India)
▶︎ Energy futures are just very weak
▶︎ 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
     >>SUMMARY<<
Having taken a bit of a break from the markets is good because I can take a fresh look. 
It feels like the overall macro situation is even more unclear now, and things aren't fitting together well enough for me to formulate a bias. There are good arguments for a soft landing (of the economy and the stock market) but also for the complete opposite. Let's not forget the chaos of a few months ago: I find it hard to believe that we've had the UK financial system almost go belly-up and we're out of the woods today. My plan for now is: watching carefully, reducing risk as much as possible and continuing to buy cheap tail hedges in case things go south.

***** USD *****
     >>BULL<<
▶︎ The economy is resilient, it's still growing and the labour market is showing no sign of softening
▶︎ The global economy is still slowing and the US is still outperforming, which should both be good for the dollar
     >>BEAR<<
▶︎ Inflation and inflation breakevens are trending lower while real yields are going nowhere
▶︎ CSII continues to go down
▶︎ USD hasn't rallied on a bear flattener and it could now be bull steepening
▶︎ Market-implied meeting probabilities shifted more dovish
▶︎ The China reopening should be bearish USD
▶︎ PMIs have been disappointing
▶︎ Treasuries have bullish COT positioning which could weigh on yields
     >>SUMMARY<<
The bearish arguments seem to have stacked up quite a bit over the last weeks. I still think there's a case for a medium-term long with the global economy slowing and the US outperforming on a relative basis. For short-term trades I'm still looking to short it because of the Fed pause, inflation coming down, positive China headlines etc.

***** EUR *****
     >>BULL<<
▶︎ The ECB looks comparatively hawkish, and they will likely continue hiking while the Fed (and others) pause
▶︎ The front-end of the yield curve is holding up well
▶︎ 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
▶︎ 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<<
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<<

     >>BEAR<<
▶︎ The inherent strength it has shown for the last few months seems to be gone
▶︎ 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<<
I feel very biased because I don't have a single bullish argument for the sterling here. But it is what it is.

***** 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 (but data is from October)
     >>BEAR<<
▶︎ Weaker PMIs for Australia and most of Asia
     >>SUMMARY<<
Hard to say what to make of it... its strength feels fake in light of how it traded last year but then the China reopening would be a fitting narrative. It has the second-highest correlation to ES, so I'll treat it as a pure risk-on/risk-off proxy for now.

***** 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
     >>SUMMARY<<
It has traded the China reopening much better than AUD, the RBNZ is still hawkish but going through the last weeks of econ data it feels fundamentally weaker than before. Still, I maintain a long bias... which doesn't mean I'll be looking at AUDNZD short automatically (even if that may sound illogical).

***** 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
▶︎ Energy is underperforming and the correlation CAD vs. CL is still positive
     >>SUMMARY<<
The short in CAD looks like a move a lot of people expected for 2023 but that has already occured and now positioning is already at a bullish extreme. The underlying fundamentals are still weak and the BOC is still dovish but it doesn't feel good to short it after how much it tanked in just a few weeks.

***** CHF *****
     >>BULL<<
▶︎ PMI still green on the heatmap
     >>BEAR<<
▶︎ Its performance is still mediocre-to-bad
▶︎ CESI is glued to its floor
▶︎ Inflation has disappointed, taking pressure off the SNB
▶︎ Positioning at bearish extremes
▶︎ Sentiment is bearish
     >>SUMMARY<<
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<<
▶︎ The latest BOJ decision was an unexpected and hawkish surprise despite the verbal pushback
▶︎ Widening of the YCC band looks like a first step
▶︎ The nomination process for the succession of Kuroda will take off in a few weeks, the market seems to be taking it as hawkish
▶︎ 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
     >>SUMMARY<<
It doesn't feel like the YCC change has been priced in completely: USDJPY is now only 5% lower than it was before the BOJ meeting, the upcoming changes in BOJ leadership and the talks/rumours around it are probably more hawkish than dovish. Add the way US yields trade and the bullish positioning in USTs, and it's a long for the yen."