EM and JPY

No One Likes the JPY today and normally that is a good think For Risk. USDJPY did break a technical level and likely the cause for most of the Move vs USD other majors % change vs JPY

  • AUD +2.3%
  • Kiwi +2%
  • CAD +1.6%
  • Euro and GBP both +1.5%

Emerging market Currencies having a nice run higher of late and that to normally a good thing for risk Lets take a look at a few metrics:

Below is the BBG EM-8 carry trade index measuring the cumulative total return of buy and hold carry trade that is long 8 EM Currencies and short USD

Below is the JP Morgan EM currency Index this too appears to have bottomed.

lastly is the Citi EM Macro Risk Index,measures risk aversion based on prices of assets that are typically sensitive to risk. the higher the metric the more risk Averse.

All signs above point to a continuation of the Risk on Environment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.