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Writer's pictureStéphan
Mar 20, 20244 min read

BoA FM survey / JPY in focus, new lows.. after tiny BoJ move / #EURCHF #GBOPCHF up / FOMC focus, all about the dots



  • FOMC expected to hold, focus on dop plot projections for rates and inflation, currently market pricing in a cut in July, decent risk of dop plot going for 2 cuts in 2024 (from current 3 cuts expected). BoE on hold tomorrow, markets expecting a 50% of a cut in June, and still a total of about 65bps of cuts priced in for the year

  • MOVE index (bond vols) closed just below the magical 100 level as we await Fed. Haven't seen MOVE this low going into FOMC in a while...

  • The Tokyo Whale has finally decided to stop buying equities. "The Bank will discontinue purchases of exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs)." >>> best part of this NIKKEI momentum gone, that all said, clearly the BoJ is in no hurry to tighten much at all...pretty hilarious moving from -0.10% to zero , when core CPI is near 2 to 2.5% (10y JGB yields fell nearly 8bps yesterday after the event..) - Thread

  • Coinbase, MicroStrategy and Super Micro Computer - all come to market selling convertible bonds together

  • Switzerland’s financial regulator Finma should have the power to rein in bank bonuses if the country wants to prevent future crises, its former chief executive officer said Tuesday. The comments come on the first anniversary of UBS Group AG’s takeover of Credit Suisse in an emergency deal brokered by the government. That followed years of scandals and restructuring at Credit Suisse, with its ultimate collapse raising questions about Finma’s efficacy

  • FT: "The balance of trade in goods hit €28bn in January, its highest level since authorities started tracking data in 2002. Last year, the eurozone recorded a trade surplus of €64bn, in contrast with the record €335bn deficit it suffered in 2022." and yet... EU chamber warns of ‘slow-motion train accident’ with China, says something needs to change

  • Bank of America’s March Global Fund Manager Survey shows fund managers’ cash level of 4.4%, a slight increase from 4.2% the previous month, while allocation to equities increased 7ppt to 28% overweight, a new high since February 2022.  Bond allocation increased 1ppt to 7% overweight

  • Crude will rise above the current consensus view of up to $90 if the Fed cuts rates in coming months, commodity veteran Jeff Currie said in his first interview since joining Carlyle. Timespreads and falling US oil and gasoline inventories also signal a tighter market >>> "Being short oil and commodities in a late-cycle expansion is like being short natural gas in a blizzard,” Jeff Currie

  • Markets : JPY weakens fairly sharply vs basket, after that 'hike' to zero interest rates... differential too big to ignore!.. MOF may well chat its a concern, but what can they do outside verbal interventions ?..probably not a whole lot that would really work for long...tough to trade form here, though the well established JPY shorts out there have NO reason to cover....The fact that BoJ still buying JGB's says it all.. FOMC, all about the dots

 


Perhaps Mark Cabana summed it up best this morning. The question isn't whether stocks are listening to bonds. It’s whether bonds are listening to stocks, which seem to be screaming loud and clear that the US economy is doing well and companies can thrive even with higher borrowing costs.
















EURCHF up


GBPCHF 1.15+ and we are on to something big


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