looking at investing.com/rates-bonds/japan-10-year-bond-yield , what would be the threshold to cross to trigger what you said on JGB. moreover you said Kuroda has pegged the 10Y to 2%, but pegged to what ? the US 10Y ?
gerFX
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interesting, it seems that you have seen something coming that nobody saw. spot on on chinese yuan, russian ruble, eurusd, gbpusd etc ... but i do not understand at all the logic of your analysis about the connection with TLT, obviously we have the inverse, eurusd fall when TLT rises, moreover you do not explain with the yen should be an exception, and obviously it is the main drawback of your forecast, usdjpy is very bullish and we do not see why yen will be the only one to resist the usd, when usd rises the first to suffer is always the yen, which is exactly what happens right now. any explanations ?
AndyM
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@gerFX, the moves are still at a very early stage. EURJPY is the key to all - we have so far 1-2-1-2 to the downside, which should be followed by an immense w3-of-3. The targets for EURJPY are at 103 or lower, which can only be achieved if EURUSD and USDJPY move down in sync. This is why I still maintain my view that USDJPY should hit 100.60 at the same time as EUR breaks below parity to the dollar. The decline in bonds has not begun yet, we have a slightly different structure vs what I expected, but a 20-30 percent downside remains in the forecast.
yansy84
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@AndyM, EURJPY should be limted below 133.40, right ?
AndyM
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@gerFX, the structure in USDJPY looks incomplete, still one move to the downside.
gerFX
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@AndyM,they say everywhere that the trump trade war will have all currencies down for competitivity reason, but that exactly where i do not understand you, why japan would be the only one to see its currency rising !?
gerFX
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@gerFX, and by the way if you forecast a collapse in gold which seems to have started, how do we correlate it with usdjpy ? jpy and gold must rise together.
AndyM
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@gerFX, absolutely not, this is not required. Gold is in a much stronger correlation with the inverse DXY (i.e. with the EUR). EUR goes down - gold goes down. And so does Crude oil.
AndyM
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@gerFX, it's important not to link any real events to the events in the markets, as the latter are driven only by the structure on the charts. One reason for JPY strength may be the forced unpeg of JPY bonds in response to the sell-off in the US bonds. Kuroda has pegged the 10Y to 2% from what I remember - this will no hold if we see a worldwide sell-off. Huge sell-off in JPY bonds - everybody is exiting from JPY bonds into the Yen. This may be the explanation of that remaining strengthening.
gerFX
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and what would be the economical interpretation of such a sell off in bonds ? is it a loss or excess of confidence in US economy ?