Feb 6, 20233 min read

Mighty EURO / BoJ candidate Amamiya #USDJPY ⬆️ / 2yUST yields up 25bps, post v.strong NFP & ISM

Mr Market came closer to FED view, after very firm ISM and payrolls on Friday, namely that the very strong employment picture will keep economy and inflation firm for longer...looked like a turn on the $$ on Friday
JPY - Japan sounds out BOJ deputy Amamiya for central bank governor. Final discussion underway for nomination of Kuroda's successor, he is someone who believes strongly in YCC, Amamiya is the architect of most of the BOJ’s policies under Kuroda (articles and news not all that clear btw, stay tuned)>>> lifted USDJPY further over week-end, this after very strong U.S job data and ISM on Friday (no recession...), USD, GOLD, all corrected pretty sharply, risk of even changing recent trend altogether, NFP increased the possibility of a soft-landing scenario where the economy avoids a severe recession while inflation/wage growth should continue to moderate (higher for longer..)
"Goldman Sachs reports that Thursday saw the single heaviest day of short-covering activity by hedge-fund clients in a decade.", FOMO still alive last week!
The more than $110bn wipeout of billionaire Gautam Adani’s companies follows other spectacular stock collapses set off by short sellers, like Enron and Wirecard, Bloomberg reports
The autumn bull was about chasing Dow stuff while NASDAQ did nothing. The 2023 bull is all about chasing those old laggards, while the Dow is doing nothing. This creates more and more P/L pain as big capital isn't capturing these shifts quickly enough...
In the context of all the debate, and different views, on the state of the US economy... ...it is remarkable how stable rate pricing by end-2023 has been. (just suck in 4.50-5.00% range for months now) / Thread
Spy balloon fallout blows US-China diplomacy further off course. Beijing is likely to be just starting a long howl at Washington for downing with fighter jets what China says was a research ‘airship’
Hackers Target Thousands of Computers; Italy Calls Meeting
Renault and Nissan sign a deal aimed at easing longstanding tensions between the two companies
Competition to make raw materials for EV batteries is taking a potentially dangerous turn amid softening markets for critical commodities such as lithium and nickel

Markets :

VIX and SPX higher >>> so players buying underlying but buying protection too
The S&P GSCI index, one of the most widely used & comprehensive commodity price indices, is back down to where it was in early December before all the China reopening chatter started...
EURUSD , below 21dma around 1.0830, previously mentioned ; key medium-term support & trend line 1.0750 (chart), EURO net longs futures positions from AM's and leverage names is huge (pls ask for more charts if you wish to)
USDJPY - up and away - if you can handle (med to long-term position) 128JPY, stay long USDJPY now, add 135+ (chart)
2y UST yields jumped 25bps on Friday, ''repricing higher for longer'' - for duration, the end of 2023 and 2024 matters most