Asia biased macro & technical analysis, Untying The Gordian Knot

Untying The Gordian Knot

Asia biased macro & technical analysis

A differentiated process with a primary focus on Asia. Technical Analysis as core and Macro drivers that could bring the view to fruition & changes that could make the idea fall apart. The objective is to be the best in class, hence corner shop.

FX & Rates

<ul><li>On December 6, 2023, Deputy Gov. Ryozo Himino and other policy board members signalled increasing optimism on price and wage increases.</li><li>Himino said at a press conference following a meeting on Wednesday that exiting the negative rate policy would have relatively little impact on Japan's economy.</li><li>"We will carefully assess the situation and consider the timing and procedure of how to exit" negative rates. </li></ul>

On December 6, 2023, Deputy Gov. Ryozo Himino and other policy board members signalled increasing optimism on price and wage increases.Himino said at a press conference following a meeting on Wednesday that exiting the negative rate policy would have relatively little impact on Japan's economy."We will carefully assess the situation and consider the timing and procedure of how to exit" negative rates. 

Part Two: JGB Yields Spike Cause Yen Mayhem

External broker reports(aggregated public sources), Scotiabank

Scotiabank

External broker reports(aggregated public sources)

Scotiabank’s global foreign exchange strategy team provides in-depth regional insights and macro-economic analysis for G10 and advanced economies, Asia Pacific, and Latin America. Find technical and fundamental strategy reports focused on trade ideas, market risks, and the unfolding macro outlook. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>FX Market Update—The USD is trading firmer overall but the “market-weighted” DXY is trading off its earlier highs ahead of the North American session and effectively continues to consolidate within the October trading range.</li><li>Risk appetite has softened somewhat as investors focus on developments in Israel/Gaza. President Biden plans to visit Israel tomorrow.</li><li>European stocks and US equity futures are steady to lower but bonds have weakened. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

FX Market Update—The USD is trading firmer overall but the “market-weighted” DXY is trading off its earlier highs ahead of the North American session and effectively continues to consolidate within the October trading range.Risk appetite has softened somewhat as investors focus on developments in Israel/Gaza. President Biden plans to visit Israel tomorrow.European stocks and US equity futures are steady to lower but bonds have weakened. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

FX Daily - USD Edges Higher, CAD Slips Ahead of CPI

Macroeconomics

<div data-attrs='{"url":"https://gordianknot.substack.com/subscribe?","text":"Subscribe"}'><div><form class="subscription-widget-subscribe"><div><ul><li><span style="font-size: var(--content-font-size);">To a 180-degree flip at the End of the Dollar hegemony and reserve system, opinions were pushed aggressively over mainstream CNN, FOX News networks, News Headlines, and fringe opinion makers looking for click baits.</span></li><li>We look at sentiment shift, and is it different from when Dollar peaked in October 2022?</li><li>We cover JPY, CNY, KRW, INR, TWD, AUD, CHF, EUR &amp; GBP charts. We have added equity and rates charts in China, India, and Korea where possible to help corroborate cross-market analysis.</li></ul></div></form></div></div>

To a 180-degree flip at the End of the Dollar hegemony and reserve system, opinions were pushed aggressively over mainstream CNN, FOX News networks, News Headlines, and fringe opinion makers looking for click baits.We look at sentiment shift, and is it different from when Dollar peaked in October 2022?We cover JPY, CNY, KRW, INR, TWD, AUD, CHF, EUR &amp; GBP charts. We have added equity and rates charts in China, India, and Korea where possible to help corroborate cross-market analysis.

Technical Analysis

<ul><li>While much focus has been on EURO/USD cross, Asian currencies haven’t seen that much focus due to range-bound markets.</li><li>That is until two weeks ago when the USD/YEN breakout caught the imagination and became the centre of all things foreign exchange. Bonds &amp; short-term interest rates have been the macro focus of 2022.</li><li>The extent to which US bond yields have risen signals that the bond sell-off is not about to end despite the inverted yield curve. It is likely to cause more pain for EM countries.</li></ul>

While much focus has been on EURO/USD cross, Asian currencies haven’t seen that much focus due to range-bound markets.That is until two weeks ago when the USD/YEN breakout caught the imagination and became the centre of all things foreign exchange. Bonds &amp; short-term interest rates have been the macro focus of 2022.The extent to which US bond yields have risen signals that the bond sell-off is not about to end despite the inverted yield curve. It is likely to cause more pain for EM countries.

Cross Asset Strategy

<ul><li>Throughout 2024, we’ve witnessed tight trading ranges across various markets: oil, FX, and Credit spreads.</li><li>Notably, Semiconductors (light blue), Gold (depicted in blue), High-Yield OAS (in red), and Bitcoin (represented in black) exhibit remarkably similar chart patterns.</li><li>In essence, these assets no longer offer diversification benefits; they have effectively become indistinguishable trades.</li></ul>

Throughout 2024, we’ve witnessed tight trading ranges across various markets: oil, FX, and Credit spreads.Notably, Semiconductors (light blue), Gold (depicted in blue), High-Yield OAS (in red), and Bitcoin (represented in black) exhibit remarkably similar chart patterns.In essence, these assets no longer offer diversification benefits; they have effectively become indistinguishable trades.

Japan

The Japanese yen is the official currency of Japan. 

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JPY (USDJPY CURNCY)

Part Two: JGB Yields Spike Cause Yen Mayhem

USDJPY fell by 3.85% and closed lower by 2.20%; the z-score fell by more than 2.25 (for 60 days). It was the most significant decline in the z...

Untying The Gordian Knot

FX Daily - USD Edges Higher, CAD Slips Ahead of CPI

Risk appetite has softened somewhat as investors focus on developments in Israel/Gaza. President Biden plans to visit Israel tomorrow.

Scotiabank

US Dollar is Dead Redux

This note extensively focuses on sentiment as the market is overwhelmed with the Negative Dollar narrative that is mainstream. And it begs the...

Untying The Gordian Knot

A powder keg

While much focus has been on EURO/USD cross, Asian currencies haven’t seen that much focus due to range-bound markets. That is until two weeks ago...

Untying The Gordian Knot

Are We Heading for a Volatility Event?

Notably, Semiconductors (light blue), Gold (depicted in blue), High-Yield OAS (in red), and Bitcoin (represented in black) exhibit remarkably...

Untying The Gordian Knot

Price Gauge

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Market Cap (USDm)

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