Draining The Swamp- Don’t Forget AUDJPY
Draining The Swamp- Don’t Forget AUDJPY
Well I should have had a bigger short. That is irrelevant now.
Apparently this still works. I should have had a more aggressive short, but I was betting on September, not August. Life goes on.
Now on to some new thoughts. Lets take a serious look into the AUDJPY. The subs get the goods, but I will give some fundamental treats for the leaches.
I know fundamentals are useless, but they help one to make sure things are a bubble or not. The carry trade is real, and for good reason. Or as long as there is free arbitrage for banks to borrow US$ and buy AUD bonds, the game may continue. (remember the bond market is the only thing even remotely close to the FX market in size- stocks are a puppet)
Aussie vs dollar carry is nuts. Thanks Ben.
Aussie Yen carry is nuts. Thanks Ben and JCB.
Just saying, as long as we keep real rates (yield curve- inflation) low in the US. The carry may continue.
Now on to the sentiment juice.
Sorry only for the rats, this is proprietary stuff, and to my knowledge I am the only one who has these two metrics (or at least did the simple math).
[amprotect=nonmember] Charts and commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero or Geronimo subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.[/amprotect] [amprotect=1,13,9,12,5]
Clearly money is dumping the carry, and historically this has been bullish AUDJPY.
Best of luck trading,
-Volar
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