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