Yes, it always makes me nervous to see retail traders begin agreeing on management. It typically means the banks are making it look like a fantastic opportunity and getting ready to pounce.
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Yes, it always makes me nervous to see retail traders begin agreeing on management. It typically means the banks are making it look like a fantastic opportunity and getting ready to pounce.
I concur bullish on the Yen, but BoE is not sure to cut rates anytime soon. There are quite a few possibilities driving the Yen strength, among which is the move of foreign currency reserves out of China and middle-eastern countries in the Yen. Additionally Russia is selling a lot of natural gas to western europe and they may not want it paid in USD.
We who consider the overall economic picture may believe the BoE will have to reduce rates, but don't forget they are not able to do anything. After the FED cut rates a few weeks past, and were then joined by the ECB pumping billions of dollars and euros to the parched markets, the BoE sat quietly by and let everyone else do the fretting. Also the government is currently nursing a fat bill for encouraging Northern Rock and I really don't understand how which may affect things.
The BoE's primary target is to keep domestic CPI in a band centred on two% development. CPI is an inflation measure that excludes some volatile things. At the moment two% is on the radar for the next few months and rates will not return until there's a substantial risk of undershoot. Particularly the price of oil and other commodities has just hit the price of goods leaving the factory gate which will ripple into CPI really shortly. I believe the BoE will wait to observe the effects of higher food and oil prices on CPI prior to making a move.
You can be bullish with yen on USD/JPY but Everywhere it Could be suicidal - for Today
Why would the carry trade ending? That is assuming that the liquidity has dried up, which would be a foolish assumption. There are billions upon billions of dollars that are still sidelined and not actively playing a part in this market. Unless interest rate spreads evaporate there'll be carry trade, plus it is also shortsighted to consider carry only concerning the yen. Any pair with a significant interest rate is ripe for carry. Plus what fundamentals are there that are so great as to create a complete market change from the attitude towards the Jpy? However you cut it and slit it, 400 basis points is 400 basis points, and I have not even taken into account the 700 basis point spread on the NZD/JPY, etc.. Unless people stop searching for return there's likely to be more carry. One more thing that has to be taken into account is that many hedge funds have a certain amount of return they wish to lock in by years end, weeks conclusion, etc. and when one of the holdings is underperforming, say SIV/CDO, etc. then they will sell their profitable positions in order to make said return percentage, they will then wait out the yr, and then heap back in later. I talked to quite a few people at capital and that's what I have been told, now I could be wrong, but that's exactly what I'm hearing. Anyone else?
I combined Clusterwise about 117;p
Still agree with him/her as well as the targets AND the risk of an abort/disruption/bounce at the monthly TL I submitted.
Been over 8 weeks. I applaud Clusterwise
Trend is sure down for all of the carry trades. . But trends change:-)
95294I guess this is the beginning of a new fad....
Just my nine pennies....
95330There has N't been a new Fad there for Decades, there is no reason to Presume something is gonna change Today
95330Thanks for all comments.
By how I don't care whether carry trade endings or maybe not but it was matching the collapse from the top 1590 pips and we've taken just two third of that profit to our pockets.
All what we will need to know when we are following the movement of the price, very straightforward
you buy,you're forecasting the price is going up and you market ayou are forecasting price is going
down.
One more advise, do your best not to trade daily basis and you may taste the success.
Many thanks
95330there is still a big difference between rates in japan and the britain, eurozone and many other countries, so there'll still be many players at the carry trades. Don't forget carry traders eliminate money.
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