end of the carry trade
Обновлено
The chart below shows when we started to switch sides in yen at 149.3x on October 18th. Three days later, we had FED 'slip of the tongue' admitting being passed the mid-point in rate cycle, and finally the dollar began to cool. BOJ have no option but to move rates higher. The clock is ticking for a move under $125, unlocking $110 and $100 with the full swing.
For those following the flows over the past few years this has been a flawless carry trade, presented in a 5-3-5 corrective sequence (since multiple decades), and finally beginning to unwind.
In terms of sequencing, Kuroda is out in April, leaving behind inflation on the doorstep and probably the end of YCC. Yen longs continue to make a lot of sense over 2023, near term watch out for some profit taking at $125.
Keep short, add on better levels, $132 will cap the highs.
For those following the flows over the past few years this has been a flawless carry trade, presented in a 5-3-5 corrective sequence (since multiple decades), and finally beginning to unwind.
In terms of sequencing, Kuroda is out in April, leaving behind inflation on the doorstep and probably the end of YCC. Yen longs continue to make a lot of sense over 2023, near term watch out for some profit taking at $125.
Keep short, add on better levels, $132 will cap the highs.
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