Video

Playlist

Show less
2:06
A closer eye on Fang stocks — #SaxoStrats
Kay Van-Petersen
06 August 2018 at 11:18 GMT
2:01
The week ahead in macro — #SaxoStrats
Kay Van-Petersen
06 August 2018 at 8:38 GMT
30:41
Macro Monday week 32: US & China inflation, RBA & RBNZ
Kay Van-Petersen
06 August 2018 at 7:39 GMT
15:29
From the Floor: Trading the trade war
#SaxoStrats
06 August 2018 at 7:32 GMT
10:18
From the Floor: EM, China feeling the heat
#SaxoStrats
03 August 2018 at 7:31 GMT
12:30
From the Floor: Why is TSLA up by 9.36%?
#SaxoStrats
02 August 2018 at 7:48 GMT
12:47
From the Floor: Trump ups the trade war ante
#SaxoStrats
01 August 2018 at 8:00 GMT
16:55
From the Floor: BoJ tweaks policy — #SaxoStrats
#SaxoStrats
31 July 2018 at 7:39 GMT
2:56
The week ahead in macro — #SaxoStrats
Kay Van-Petersen
30 July 2018 at 8:09 GMT
40:21
FX Options webinar: Volatility term structure
Dan Larsen
27 July 2018 at 10:18 GMT
48:21
Bonds update webinar: Topics to monitor — #SaxoStrats
Althea Spinozzi
26 July 2018 at 9:56 GMT
Video / 14 February 2018 at 8:29 GMT

From the Floor: Yen soars as USD slides ahead of CPI – #SaxoStrats

#SaxoStrats
  • USDJPY dips below 107.00 for first time since Nov. 2016
  • Quality of the break is in question given absence of risk contagion
  • US CPI will be the most watched macro figure today, testing market psychology 
  • Dollar-yen generally very sensitive to US economic developments
  • In South Africa, it's just a question of time before Zuma goes
  • Equities rebound is still not convincing
  • VIX spot remains elevated and VIX futures went up
  • The yield curve has been rising for the past few weeks
  • Investors would likely sell of treasuries if CPI unexpectedly high
 
By Clare MacCarthy

There's much to keep us occupied in financial markets today: a fresh surge by the Japanese yen; dollar wobbles ahead of a key US inflation release; GDP updates from across Europe and another push in South Africa to unseat the country's president, Jacob Zuma.

First, to the dollar slide and the yen advance which had USDJPY dipping below 1107.00 for the first time since November 2016: "The quality of the USDJPY break is in question as it's not accompanied by increased risk contagion," notes John J Hardy, Saxo's head of FX strategy. But the cross, he says, is "generally sensitive to US economic developments" so would likely be very reactive to any surprises in the US CPI news later today.

A response would also be likely in US treasuries, says Althea Spinozzi, from Saxo's bond trading desk. "If the CPI is stronger than expected then investors would sell off as they would then expect an acceleration in the pace of rate kikes," she says.

In equities, meanwhile, gains have been notched on several leading bourses but the rebound "is still not convincing" says Peter Garnry, Saxo's head of equity strategy. "The VIX spot remains elevated and VIX futures went up while USDJPY also remains at critical levels. This rebound is still not firm, so stay alert. Increasing defensive exposure is prudent," he concludes.

USDJPY new 15-month low, despite lack of further risk aversion…
usdjpy
 Source: Saxo Bank



Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Tradingfloor.com and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Tradingfloor.com is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor.com or as a result of the use of the Tradingfloor.com. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail