Compare text

Find the difference between two text files

Real-time diff

Unified diff

Collapse lines

Highlight change

Syntax highlighting

Tools

Diffchecker Desktop The most secure way to run Diffchecker. Get the Diffchecker Desktop app: your diffs never leave your computer!Get Desktop

fx:macro Summary Changes 2023_01_28

Created 2 years agoDiff never expires

39 removals

131 lines

36 additions

130 lines

"21.02.23

"28.01.23

***** MACRO *****

>>BULL<<

▶︎ The China opening is happening, and while its effects may take time to play out they eventually will

▶︎ The China opening is happening, Semiconductors and Asian (non-JP) stocks are rallying

▶︎ COT positioning in NQ futures is bullish

▶︎ Copper is performing

▶︎ Credit spreads seem contained, the Corporate Bond Market Distress Index is lower

▶︎ No signs of stress from equity volatility and options

▶︎ Market breadth is looking pretty decent

▶︎ Constructive price action in key sectors: bullish Comm/Tech vs. bearish Utilities

>>BEAR<<

▶︎ Short-term: correlation between ES-VVIX and VIX-VVIX is high which is a warning sign for a top in equities

▶︎ Global and Asian PMIs are weakening further (notable exception: India)

▶︎ US treasuries have started to perform: it still looks like a trade on a Fed pivot with treasuries rising when everything else is but it could quickly become a play on softer growth

▶︎ Six out of eight G8 2s10s have so far inverted

▶︎ Fear & Greed is at Greed (but far from extremes)

▶︎ Fear & Greed is at Greed

>>SUMMARY<<

The market continues to improve, the bullish COT positioning in NQ surprised me, breadth is doing well, price action in key sectors looks good, and so on. On a longer timeframe, we still have QT going on, there's no Fed pivot and we've seen how quickly things can get out of hand last year.

As last week, the market continues to improve. With about 70% of S&P 500 stocks above their 200-day moving averages... are we really still in a bear market? The right sectors are performing, there's a huge short position in NQ already while it is at the top of its range (who is going to short it here?). Positive factors outweigh the bearish ones at the moment but: a) hardly anything looks like a good long from a risk-reward perspective, and b) the usual caveats I mention are still in place.

***** USD *****

>>BULL<<

▶︎ The economy is resilient, it's still growing and the labour market is showing no sign of softening

▶︎ USD selling finally shows up in COT data and the PAIN index but there's still some way to go until we reach a stretched short

▶︎ Seasonality is positive

>>BEAR<<

▶︎ A lot of dovish comments (at least perceived that way) from the Fed before the blackout period, FedWatch decidedly more dovish too

▶︎ The implied Fed Funds Rates for next year are tanking

▶︎ Inflation and inflation breakevens are trending lower while real yields are going nowhere

▶︎ CESI for the G10 has been improving for months now, and US CESI is now falling: this doesn't square with the Dollar Smile at all

▶︎ CSII continues to go down

▶︎ The China reopening should be bearish USD

▶︎ PMIs have been disappointing

▶︎ Treasuries have bullish COT positioning which could weigh on yields

▶︎ The market is still very long USD (according to PAIN) or at least not extremely short (according to COT)

>>SUMMARY<<

The fundamentals are bearish and the market is still positioned too long. The China reopening, the hawkish turn from the BOJ, the ECB that will continue to hike are all pointing to a lower dollar. But: DXY hasn't gone anywhere this week when there were good catalysts for a move lower.

FOMC this week will be the main thing, and nobody (including me) expects a surprise. The fundamentals still call for a short bias but I don't have a clear direction I will trade this week. The dollar short seems to have gotten a bit ahead of itself so a pop higher wouldn't surprise me.

***** EUR *****

>>BULL<<

▶︎ Hawkish ECB Minutes this week

▶︎ The ECB looks comparatively hawkish, and they will likely continue hiking while the Fed (and others) pause

▶︎ Bear flattening in 2s10s continues

▶︎ BTP-Bund is making lower highs and lower lows

▶︎ BTP-Bund has made a lower low this week

▶︎ The mild winter has completely soothed fears of an energy shortage

▶︎ CESI is going strong

▶︎ PMIs have been surprising to the upside and have been less bad than feared

▶︎ PMIs have been surprising to the upside and have been less bad than feared (again this week)

▶︎ Stock markets are outperforming

▶︎ Seasonality is bullish

▶︎ Bearish sentiment

>>BEAR<<

▶︎ Positioning is at bearish extremes

▶︎ It's not profiting as much from the weak dollar as expected

▶︎ Not sure what it would take for the Ukraine war to spook the market again: Belarus attacking, another mobilization... not sure but it's still a relevant risk

▶︎ Bearish seasonality

>>SUMMARY<<

Same as the last two weeks: A lot more bullish arguments than bearish ones. The extreme in positioning has me a bit worried, and I wouldn't want to be long on a higher timeframe because of it but for short-term trades I'm looking to play it from the long side.

The fundamentals haven't really changed, the bias remains long. It will be all about the ECB, so it's tough to make a call beforehand but if they deliver 50 bps and guidance remains hawkish (as I expect), German 2y yields have some way to go higher and the EUR as well.

***** GBP *****

>>BULL<<

▶︎ CPI and Earnings surprised to the upside this week

▶︎ CPI suprising to the upside

▶︎ It was (once again) the strongest currency this week

>>BEAR<<

▶︎ The economic outlook is bleak, they expect to be in a recession for the entire year

▶︎ The entire country seems to be in disarray with everyone on strike and people being squeezed

▶︎ The entire country seems to be in disarray with everyone on strike and people being squeezed; the strikes haven't been front-page lately but they're still going on

▶︎ Dovish central bank with two dissenters at the last meeting

▶︎ CESI is clearly lagging its Eurozone counterpart

▶︎ Weaker on the PMI heatmap

▶︎ PMIs were quite pessimistic and negative (especially compared to the Eurozone)

▶︎ Even if its 2s and 10s look decent, they aren't driving it at the moment (negative correlation)

>>SUMMARY<<

Last week I wrote that it feels like 2022 again where GBP just went up despite all the bad data. Well, it's clearly happening again (admittedly, we've had upside surprises in that data), so I'm moving the bias to neutral. It's still fairly correlated to ES (and inversely to VIX), so it remains a risk on/risk off play.

I have no idea what to expect from the Bank of England this week. There was hardly any communication since their last meeting. Probably more internal dissent. Going into the week without a bias here too.

***** AUD *****

>>BULL<<

▶︎ It has started to perform somewhat... not sure why now when it did so poorly over the last months: Chinese reopening finally catching on?

▶︎ We are expecting positive data from China this week

▶︎ It's showing inherent strength

▶︎ Last CPI releases surprised to the upside

▶︎ OECD CLI has it outperforming

>>BEAR<<

▶︎ Bad labour market report this week, taking pressure off the RBA after the CPI beat the week before

▶︎ Weaker PMIs for Australia and most of Asia

>>SUMMARY<<

There's been nothing that would make me change the bias. It's uncorrelated to its 2s, its 10s and its 2s10s, so it's pretty much doing its own thing. Will watch Iron Ore and Gold more because of the high correlation (0.72 and 0.74 over 30 days).

I'm changing the bias to long because a) I like its performance over the last few weeks in the overall context, b) we get to see more positive data from China, and c) inflation prints have surprised.

***** NZD *****

>>BULL<<

▶︎ It's showing inherent strength

▶︎ The China reopening should be positive for NZD with tourism catching a bid (note the Visitor Arrivals this week that were completely looked through, though)

▶︎ The RBNZ is decidedly more hawkish than the neighbouring RBA

▶︎ CPI surprise to the upside

>>BEAR<<

▶︎ Incoming economic data is weakening

▶︎ The phase where the China reopening benefitted NZD in favour of AUD is clearly over

▶︎ Positioning is bearish

▶︎ CESI has rolled over

>>SUMMARY<<

We've had a stellar Visitor Arrivals number this week but NZD hasn't reacted at all, Business Confidence and the Manufacturing PMI were both bad, yet NZD is the strongest currency for the week. The drivers clearly aren't economic data at the moment.

As I wrote last week: the current drivers aren't economic data, which is sort of good for the NZD because the incoming data is mostly worse. It's being dragged along by AUD.

***** CAD *****

>>BULL<<

▶︎ CPI surprised to the upside this week (Median and Trimmed)

▶︎ The BOC was dovish and CL is down for the week but CAD was the second-strongest currency

▶︎ CESI is going higher

▶︎ CESI is weakening but still up

▶︎ Positioning is bullish

▶︎ 25-delta risk reversal seeing it stronger

>>BEAR<<

▶︎ The BOC has practically announced the end of their hiking cycle

▶︎ The BOC has announced the end of their hiking cycle

▶︎ It's inherently weak

>>SUMMARY<<

The last three CPI prints mostly surprised to the upside, and there's a decent chance the BOC could put in a 50 bps hike, which would make it look pretty hawkish compared to the neighbouring Fed. At this point, I see more upside than downside but I'm not changing the bias because it would essentially be a bet on the rate decision next week.

I'm a bit surprised the CAD has taken the BOC announcement so well. No reason to change the bias though, since the BOC have stopped but others are still going (or will start at some point).

***** CHF *****

>>BULL<<

▶︎ PMI still green on the heatmap

▶︎ Sentiment is bearish CHF, i.e. a bullish factor

>>BEAR<<

▶︎ Its performance is still mediocre-to-bad

▶︎ CESI is glued to its floor

▶︎ Last inflation print was deflationary and surprised to the downside, CSII is falling

▶︎ Seasonality is bearish

>>SUMMARY<<

It feels a bit like the opposite of GBP: it ""should"" have been stronger than it was, and I have to admit that my understanding of it just isn't very good at the moment. Its correlation profile suggests to trade it as a risk on/risk off proxy, so that's what I'm left with.

Like last week: It feels a bit like the opposite of GBP: it ""should"" have been stronger than it was, and I have to admit that my understanding of it just isn't very good at the moment. Its correlation profile suggests to trade it as a risk on/risk off proxy, so that's what I'm left with.

***** JPY *****

>>BULL<<

▶︎ JPY has been trading a fair bit stronger than expected in the wake of the dovish BOJ meeting this week

▶︎ It seems clear that the BOJ is slowly steering towards some form of exit from their strict easing

▶︎ The nomination process for the succession of Kuroda will take off shortly, the market seems to be taking it as hawkish

▶︎ Positioning still has a pretty long way to go until it ""normalizes""

▶︎ Inflation has been surprising to the upside (not showing up in the CSII, though)

▶︎ Japanese yields are outperforming

▶︎ OECD CLI outperformer

>>BEAR<<

▶︎ Short-term could see some unwinding of longs that had hoped for another tweak in YCC policy

▶︎ The 10y yield has backed off the new 0.5% upper bound

▶︎ A lot of jawboning from Kuroda, so another change in policy before his term ends looks unlikely

▶︎ Still the most dovish central bank out there

▶︎ Bullish sentiment

▶︎ 25-delta risk reversals are seeing it weaker

▶︎ Seasonality is bearish

>>SUMMARY<<

The long remains because the policy normalization has been merely pushed back to a later date. Shorter-term could see some more weakness after the disappointing BOJ meeting."

Unchanged from last week: The long remains because the policy normalization has been merely pushed back to a later date. Shorter-term could see some more weakness after the disappointing BOJ meeting."

Saved diffs

Original text

Open file

"21.02.23
***** MACRO *****
     >>BULL<<
▶︎ The China opening is happening, and while its effects may take time to play out they eventually will
▶︎ COT positioning in NQ futures is bullish
▶︎ Copper is performing
▶︎ Credit spreads seem contained, the Corporate Bond Market Distress Index is lower
▶︎ No signs of stress from equity volatility and options
▶︎ Market breadth is looking pretty decent
▶︎ Constructive price action in key sectors: bullish Comm/Tech vs. bearish Utilities
     >>BEAR<<
▶︎ Short-term: correlation between ES-VVIX and VIX-VVIX is high which is a warning sign for a top in equities
▶︎ Global and Asian PMIs are weakening further (notable exception: India)
▶︎ US treasuries have started to perform: it still looks like a trade on a Fed pivot with treasuries rising when everything else is but it could quickly become a play on softer growth
▶︎ Six out of eight G8 2s10s have so far inverted
▶︎ Fear & Greed is at Greed (but far from extremes)
     >>SUMMARY<<
The market continues to improve, the bullish COT positioning in NQ surprised me, breadth is doing well, price action in key sectors looks good, and so on. On a longer timeframe, we still have QT going on, there's no Fed pivot and we've seen how quickly things can get out of hand last year.

***** USD *****
     >>BULL<<
▶︎ The economy is resilient, it's still growing and the labour market is showing no sign of softening
     >>BEAR<<
▶︎ A lot of dovish comments (at least perceived that way) from the Fed before the blackout period, FedWatch decidedly more dovish too
▶︎ The implied Fed Funds Rates for next year are tanking
▶︎ Inflation and inflation breakevens are trending lower while real yields are going nowhere
▶︎ CESI for the G10 has been improving for months now, and US CESI is now falling: this doesn't square with the Dollar Smile at all
▶︎ CSII continues to go down
▶︎ The China reopening should be bearish USD
▶︎ PMIs have been disappointing
▶︎ Treasuries have bullish COT positioning which could weigh on yields
▶︎ The market is still very long USD (according to PAIN) or at least not extremely short (according to COT)
     >>SUMMARY<<
The fundamentals are bearish and the market is still positioned too long. The China reopening, the hawkish turn from the BOJ, the ECB that will continue to hike are all pointing to a lower dollar. But: DXY hasn't gone anywhere this week when there were good catalysts for a move lower.

***** EUR *****
     >>BULL<<
▶︎ Hawkish ECB Minutes this week
▶︎ The ECB looks comparatively hawkish, and they will likely continue hiking while the Fed (and others) pause
▶︎ Bear flattening in 2s10s continues
▶︎ BTP-Bund has made a lower low this week
▶︎ The mild winter has completely soothed fears of an energy shortage
▶︎ CESI is going strong
▶︎ PMIs have been surprising to the upside and have been less bad than feared
▶︎ Stock markets are outperforming
▶︎ Seasonality is bullish
▶︎ Bearish sentiment
     >>BEAR<<
▶︎ Positioning is at bearish extremes
▶︎ It's not profiting as much from the weak dollar as expected
▶︎ Not sure what it would take for the Ukraine war to spook the market again: Belarus attacking, another mobilization... not sure but it's still a relevant risk

>>SUMMARY<<
Same as the last two weeks: A lot more bullish arguments than bearish ones. The extreme in positioning has me a bit worried, and I wouldn't want to be long on a higher timeframe because of it but for short-term trades I'm looking to play it from the long side.

***** GBP *****
     >>BULL<<
▶︎ CPI and Earnings surprised to the upside this week
▶︎ It was (once again) the strongest currency this week
     >>BEAR<<
▶︎ The economic outlook is bleak, they expect to be in a recession for the entire year
▶︎ The entire country seems to be in disarray with everyone on strike and people being squeezed 
▶︎ Dovish central bank with two dissenters at the last meeting
▶︎ CESI is clearly lagging its Eurozone counterpart
▶︎ Weaker on the PMI heatmap
▶︎ Even if its 2s and 10s look decent, they aren't driving it at the moment (negative correlation)
     >>SUMMARY<<
Last week I wrote that it feels like 2022 again where GBP just went up despite all the bad data. Well, it's clearly happening again (admittedly, we've had upside surprises in that data), so I'm moving the bias to neutral. It's still fairly correlated to ES (and inversely to VIX), so it remains a risk on/risk off play.

***** AUD *****
     >>BULL<<
▶︎ It has started to perform somewhat... not sure why now when it did so poorly over the last months: Chinese reopening finally catching on?
▶︎ OECD CLI has it outperforming

>>BEAR<<
▶︎ Bad labour market report this week, taking pressure off the RBA after the CPI beat the week before
▶︎ Weaker PMIs for Australia and most of Asia

>>SUMMARY<<
There's been nothing that would make me change the bias. It's uncorrelated to its 2s, its 10s and its 2s10s, so it's pretty much doing its own thing. Will watch Iron Ore and Gold more because of the high correlation (0.72 and 0.74 over 30 days).

***** NZD *****
     >>BULL<<
▶︎ It's showing inherent strength
▶︎ The China reopening should be positive for NZD with tourism catching a bid (note the Visitor Arrivals this week that were completely looked through, though)
▶︎ The RBNZ is decidedly more hawkish than the neighbouring RBA
     >>BEAR<<
▶︎ Positioning is bearish
▶︎ CESI has rolled over
     >>SUMMARY<<
We've had a stellar Visitor Arrivals number this week but NZD hasn't reacted at all, Business Confidence and the Manufacturing PMI were both bad, yet NZD is the strongest currency for the week. The drivers clearly aren't economic data at the moment.

***** CAD *****
     >>BULL<<
▶︎ CPI surprised to the upside this week (Median and Trimmed)
▶︎ CESI is going higher
▶︎ Positioning is bullish
▶︎ 25-delta risk reversal seeing it stronger
     >>BEAR<<
▶︎ The BOC has practically announced the end of their hiking cycle
▶︎ It's inherently weak
     >>SUMMARY<<
The last three CPI prints mostly surprised to the upside, and there's a decent chance the BOC could put in a 50 bps hike, which would make it look pretty hawkish compared to the neighbouring Fed. At this point, I see more upside than downside but I'm not changing the bias because it would essentially be a bet on the rate decision next week.

***** CHF *****
     >>BULL<<
▶︎ PMI still green on the heatmap
▶︎ Sentiment is bearish CHF, i.e. a bullish factor
     >>BEAR<<
▶︎ Its performance is still mediocre-to-bad
▶︎ CESI is glued to its floor
▶︎ Last inflation print was deflationary and surprised to the downside, CSII is falling
     >>SUMMARY<<
It feels a bit like the opposite of GBP: it ""should"" have been stronger than it was, and I have to admit that my understanding of it just isn't very good at the moment. Its correlation profile suggests to trade it as a risk on/risk off proxy, so that's what I'm left with.

***** JPY *****
     >>BULL<<
▶︎ JPY has been trading a fair bit stronger than expected in the wake of the dovish BOJ meeting this week
▶︎ It seems clear that the BOJ is slowly steering towards some form of exit from their strict easing
▶︎ The nomination process for the succession of Kuroda will take off shortly, the market seems to be taking it as hawkish
▶︎ Positioning still has a pretty long way to go until it ""normalizes""
▶︎ Inflation has been surprising to the upside (not showing up in the CSII, though)
▶︎ OECD CLI outperformer
     >>BEAR<<
▶︎ Short-term could see some unwinding of longs that had hoped for another tweak in YCC policy
▶︎ The 10y yield has backed off the new 0.5% upper bound
▶︎ A lot of jawboning from Kuroda, so another change in policy before his term ends looks unlikely
▶︎ Still the most dovish central bank out there
▶︎ Bullish sentiment
     >>SUMMARY<<
The long remains because the policy normalization has been merely pushed back to a later date. Shorter-term could see some more weakness after the disappointing BOJ meeting."

Changed text

Open file

"28.01.23
***** MACRO *****
     >>BULL<<
▶︎ The China opening is happening, Semiconductors and Asian (non-JP) stocks are rallying
▶︎ COT positioning in NQ futures is bullish
▶︎ Copper is performing
▶︎ Credit spreads seem contained, the Corporate Bond Market Distress Index is lower
▶︎ No signs of stress from equity volatility and options
▶︎ Market breadth is looking pretty decent
▶︎ Constructive price action in key sectors: bullish Comm/Tech vs. bearish Utilities
     >>BEAR<<
▶︎ Short-term: correlation between ES-VVIX and VIX-VVIX is high which is a warning sign for a top in equities
▶︎ Global and Asian PMIs are weakening further (notable exception: India)
▶︎ US treasuries have started to perform: it still looks like a trade on a Fed pivot with treasuries rising when everything else is but it could quickly become a play on softer growth
▶︎ Six out of eight G8 2s10s have so far inverted
▶︎ Fear & Greed is at Greed
     >>SUMMARY<<
As last week, the market continues to improve. With about 70% of S&P 500 stocks above their 200-day moving averages... are we really still in a bear market? The right sectors are performing, there's a huge short position in NQ already while it is at the top of its range (who is going to short it here?). Positive factors outweigh the bearish ones at the moment but: a) hardly anything looks like a good long from a risk-reward perspective, and b) the usual caveats I mention are still in place.

***** USD *****
     >>BULL<<
▶︎ The economy is resilient, it's still growing and the labour market is showing no sign of softening
▶︎ USD selling finally shows up in COT data and the PAIN index but there's still some way to go until we reach a stretched short
▶︎ Seasonality is positive
     >>BEAR<<
▶︎ A lot of dovish comments (at least perceived that way) from the Fed before the blackout period, FedWatch decidedly more dovish too
▶︎ The implied Fed Funds Rates for next year are tanking
▶︎ Inflation and inflation breakevens are trending lower while real yields are going nowhere
▶︎ CESI for the G10 has been improving for months now, and US CESI is now falling: this doesn't square with the Dollar Smile at all
▶︎ CSII continues to go down
▶︎ The China reopening should be bearish USD
▶︎ Treasuries have bullish COT positioning which could weigh on yields
     >>SUMMARY<<
FOMC this week will be the main thing, and nobody (including me) expects a surprise. The fundamentals still call for a short bias but I don't have a clear direction I will trade this week. The dollar short seems to have gotten a bit ahead of itself so a pop higher wouldn't surprise me.

***** EUR *****
     >>BULL<<
▶︎ The ECB looks comparatively hawkish, and they will likely continue hiking while the Fed (and others) pause
▶︎ BTP-Bund is making lower highs and lower lows
▶︎ The mild winter has completely soothed fears of an energy shortage
▶︎ CESI is going strong
▶︎ PMIs have been surprising to the upside and have been less bad than feared (again this week)
▶︎ Stock markets are outperforming
▶︎ Bearish sentiment
     >>BEAR<<
▶︎ Positioning is at bearish extremes
▶︎ It's not profiting as much from the weak dollar as expected
▶︎ Not sure what it would take for the Ukraine war to spook the market again: Belarus attacking, another mobilization... not sure but it's still a relevant risk
▶︎ Bearish seasonality

>>SUMMARY<<
The fundamentals haven't really changed, the bias remains long. It will be all about the ECB, so it's tough to make a call beforehand but if they deliver 50 bps and guidance remains hawkish (as I expect), German 2y yields have some way to go higher and the EUR as well.

***** GBP *****
     >>BULL<<
▶︎ CPI suprising to the upside
     >>BEAR<<
▶︎ The economic outlook is bleak, they expect to be in a recession for the entire year
▶︎ The entire country seems to be in disarray with everyone on strike and people being squeezed; the strikes haven't been front-page lately but they're still going on
▶︎ Dovish central bank with two dissenters at the last meeting
▶︎ CESI is clearly lagging its Eurozone counterpart
▶︎ PMIs were quite pessimistic and negative (especially compared to the Eurozone)
▶︎ Even if its 2s and 10s look decent, they aren't driving it at the moment (negative correlation)
     >>SUMMARY<<
I have no idea what to expect from the Bank of England this week. There was hardly any communication since their last meeting. Probably more internal dissent. Going into the week without a bias here too.

***** AUD *****
     >>BULL<<
▶︎ We are expecting positive data from China this week
▶︎ It's showing inherent strength
▶︎ Last CPI releases surprised to the upside
▶︎ OECD CLI has it outperforming
     >>BEAR<<
▶︎ Weaker PMIs for Australia and most of Asia

>>SUMMARY<<
I'm changing the bias to long because a) I like its performance over the last few weeks in the overall context, b) we get to see more positive data from China, and c) inflation prints have surprised.

***** NZD *****
     >>BULL<<
▶︎ The RBNZ is decidedly more hawkish than the neighbouring RBA
▶︎ CPI surprise to the upside
     >>BEAR<<
▶︎ Incoming economic data is weakening
▶︎ The phase where the China reopening benefitted NZD in favour of AUD is clearly over
▶︎ Positioning is bearish
▶︎ CESI has rolled over
     >>SUMMARY<<
As I wrote last week: the current drivers aren't economic data, which is sort of good for the NZD because the incoming data is mostly worse. It's being dragged along by AUD.

***** CAD *****
     >>BULL<<
▶︎ The BOC was dovish and CL is down for the week but CAD was the second-strongest currency
▶︎ CESI is weakening but still up
▶︎ Positioning is bullish
▶︎ 25-delta risk reversal seeing it stronger
     >>BEAR<<
▶︎ The BOC has announced the end of their hiking cycle
     >>SUMMARY<<
I'm a bit surprised the CAD has taken the BOC announcement so well. No reason to change the bias though, since the BOC have stopped but others are still going (or will start at some point).

***** CHF *****
     >>BULL<<
▶︎ PMI still green on the heatmap
▶︎ Sentiment is bearish CHF, i.e. a bullish factor
     >>BEAR<<
▶︎ Its performance is still mediocre-to-bad
▶︎ CESI is glued to its floor
▶︎ Last inflation print was deflationary and surprised to the downside, CSII is falling
▶︎ Seasonality is bearish
     >>SUMMARY<<
Like last week: It feels a bit like the opposite of GBP: it ""should"" have been stronger than it was, and I have to admit that my understanding of it just isn't very good at the moment. Its correlation profile suggests to trade it as a risk on/risk off proxy, so that's what I'm left with.

***** JPY *****
     >>BULL<<
▶︎ JPY has been trading a fair bit stronger than expected in the wake of the dovish BOJ meeting this week
▶︎ It seems clear that the BOJ is slowly steering towards some form of exit from their strict easing
▶︎ The nomination process for the succession of Kuroda will take off shortly, the market seems to be taking it as hawkish
▶︎ Positioning still has a pretty long way to go until it ""normalizes""
▶︎ Inflation has been surprising to the upside (not showing up in the CSII, though)
▶︎ Japanese yields are outperforming
▶︎ OECD CLI outperformer
     >>BEAR<<
▶︎ A lot of jawboning from Kuroda, so another change in policy before his term ends looks unlikely
▶︎ Still the most dovish central bank out there
▶︎ Bullish sentiment
▶︎ 25-delta risk reversals are seeing it weaker
▶︎ Seasonality is bearish
     >>SUMMARY<<
Unchanged from last week: The long remains because the policy normalization has been merely pushed back to a later date. Shorter-term could see some more weakness after the disappointing BOJ meeting."