World economy talk

[uls]

things are calmer today

USDJPY is behaving... fluctuating all day between 94+ and 95+

US 10 yr yield also behaving


that's all that matters in the financial universe

[uls]

US equities opened higher but could not sustain... followed USDJPY lower





something i've been pointing out for weeks -- the tight correlation between USDJPY and equities

http://finance.yahoo.com/news/stock-...06204.html?l=1

The unwinding of trades linked to central bank support has recently strengthened correlations between asset classes.

The 200-day correlation between the S&P 500 and the Japanese currency stands at minus 0.91, near its strongest inverse correlation in more than four years. Bets against the yen, cemented on expectations that Tokyo will keep accommodative monetary policy in place, have been used to finance long positions in Wall Street equities.

[uls]

so here's proof of what i've been saying all week --- that foreign funds have been getting out of emerging markets

[chrismarte]

sir uls... may babayaran ako next year in JPY... may pera ako on hand ano nakikita sa yen for the next 12months. tataas o baba...mas mabuti ba na ngayon pa lang bumili na ako nang yen sa rate na 1 JPY = 0.454135 PHP (via XE - The World's Favorite Currency and Foreign Exchange Site) or antay pa ako baka mag mura pa ang yen? TIA

[uls]

we think USDJPY will be above 100 at yr end (naturally we can be wrong)

[uls]

but that's what we're thinking

coz it will take time to see the effect of Japan QE

[uls]

USDJPY direction is north

so the nikkei is up

[uls]

the most important thing this week -- FOMC statement June 19

[uls]

USD steady ahead of FOMC meeting

dollar index

[uls]

FX positioning before the FOMC statement

USD stronger against all major currencies

so the market is betting the Fed will reiterate reducing asset buying

[uls]

bouncing back after the brutal sell-off

MSCI Asia Pacific Index

[Monseratto]

Bye bye Bernake? Wonder how will the markets react...

President Barack Obama said Federal Reserve Chairman Ben S. Bernanke has stayed in his post “longer than he wanted,” one of the clearest signals the central bank chief will leave when his current term expires next year.

While neither the White House nor Bernanke have said definitively that the Fed chairman won’t seek a third term, there have been some signals that the chairman would like to leave.

Bernanke broke with tradition and decided not to attend the Fed’s annual central banking conference in Jackson Hole, Wyoming, this year.

“The odds of Bernanke staying on were pretty low,” said Michael Feroli, chief U.S. economist for JPMorgan Chase & Co. in New York. “This will confirm one aspect of the story and allow people to think of the other scenarios -- somebody else will be taking the helm.”

Bernanke told reporters in March that he’s “spoken to the president a bit” about his future and felt no personal responsibility to stay at the Fed and oversee the reversal of its policies.

[uls]

[uls]

China interbank lending rates spiked this month




they say it's coz of less foreign capital flowing into China

less foreign money being converted to yuan resulting in less yuan in the system

there was a rumor that several Chinese banks were going to fail which caused banks to stop lending to each other

[uls]

[ame]www.youtube.com/watch?v=Q5J0vjla3-k[/ame]

[uls]

FX positioning ahead of the FOMC statement

USD now weaker against all major currencies

[uls]

liquidity crunch

China interbank borrowing cost

[uls]

reaction to the Fed

boom!

dollar index


US 10 yr yield

[uls]

China June HSBC flash manufacturing PMI 48.3 (49.1 expected)

---

whose economy is highly dependent on China?

Australia

[uls]

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