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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (17756)	2/10/2016 1:28:35 AM
From: John Pitera	Respond to of 33421

Goldman Sachs Abandons Five of Six 'Top Trade' Calls for 2016 by Rachel Evans and Andrea Wong bloomberg.com February 9, 2016 — 11:43 AM CST Updated on February 9, 2016 — 4:28 PM CST Goldman Sachs to clients: whoops. Just six weeks into 2016, the New York-based bank *has abandoned five of six* *recommended* *top trades for the year.* The dollar versus a basket of euro and yen; yields on Italian bonds versus their German counterparts; *U.S. inflation expectations: Goldman Sachs Group Inc. was wrong on all that and more. The fumbles underscore the volatility that has beset global markets, accelerating price swings across currencies, stocks and bonds. Signs the world economy is suffering amid a slowdown in China have fueled unease about the creditworthiness of banks and other corporations, spurring a bid for haven assets such as the yen and the euro. (editorial note by JJP.... when you get accelerating volatility across multiple asset classes.... currencies, stocks, bonds on a global basis.... that is the time when window of vulnerability is wide open for major blow-ups that provide real market panics and very aggressive bear markets ...... THIS is worse than 2008...... because you can not have major sovereign bonds like the Japanese 10 year giving you a negative yield and the Swiss 10 year bond yielding -20 basis points.)" “Markets have started out this week by aggressively de-risking, apparently owing to fears that the recent slowdown in global growth could descend into recession,” Charles Himmelberg, chief credit strategist, wrote in a note to clients Tuesday. “Financial credit spreads are spiking, especially in Europe, possibly signaling a reactivation of systemic risk concerns.”* Neither Himmelberg nor Francesco Garzarelli, Goldman Sachs’s London-based co-head of fixed-income strategy, could immediately be reached for further comment, when contacted by phone and e-mail. Calls AxedThe New York-based bank closed its call for dollar strength versus an equally weighted basket of the euro and yen on Tuesday, recording a potential loss of about 5 percent, Himmelberg wrote in his note. Goldman Sachs also ended a bet on five-year five-year forward Italian sovereign yields versus their German counterparts for a loss of about 0.5 percent, he wrote. Japan’s currency strengthened past 115 per dollar for the first time since 2014 on Tuesday while the euro rose to a more than three-month high. JPMorgan Chase & Co.’s gauge of global currency swings rose to 11.9 percent on Tuesday, its highest in more than two years. Measures of stock-market and bond volatility also climbed. While that’s derailed Goldman’s trades, it hasn’t curbed its enthusiasm for their rationale. Increasingly divergent monetary policy in the U.S. versus the euro area and Japan “still favors dollar strength,” Himmelberg wrote. Further easing in Europe is also “conducive to a more positive backdrop for peripheral sovereign bonds.” Goldman Sachs was forced out of three of its top picks for the year last month: a bet on large U.S. banks against the Standard & Poor’s 500 Index, a wager on 10-year break-evens, and a call on the Mexican peso and Russian ruble strengthening versus the South African rand and Chilean peso. The latter closed on Jan. 21 for a potential loss of 6.6 percent. The bank’s one remaining trade is a wager on a basket of 48 non-commodity exporting companies versus a basket of 50 emerging-market bank stocks. That’s trading 4.5 percent above its opening level in November.

To: John Pitera who wrote (17756)	2/11/2016 7:08:08 AM
From: John Pitera	Respond to of 33421

The 35 Year Monthly USD/JPY has advanced all the way to 111 this morning..... as the carry trade unwinds and the YEN continues to get a flight to safety bid. The Break out of the bullish ascending triangle on the YEN chart that is the futures type inversion of the Interbank market is showing a breakout above the 86 Level The USD has put in at least an intermediate term double top... with the YEN looking as positive as it does... I believe some of the USD decline is occurring as US Equities are being sold..........with the USD being sold and so many asset classes and currencies under pressure we are seeing a run to Gold. JJP

To: John Pitera who wrote (17756)	2/21/2017 12:32:48 AM
From: John Pitera	1 Recommendation Recommended By 3bar Respond to of 33421

Yen to Hit Bottom at 120 Before Rallying, Economist Jen Says by Netty Idayu Ismail February 20, 2017, 11:00 AM EST February 20, 2017, updated 6:31 PM EST The yen will slump to 120 per dollar in six months as the Federal Reserve raises U.S. interest rates but that’s about as weak as it will get, former International Monetary Fund Economist Stephen Jen says. The currency will rebound to 100 by early 2018 as the Bank of Japan’s policies of controlling yields and adding stimulus through bond purchases reach a limit, said Jen, chief executive officer at hedge fund Eurizon SLJ Capital Ltd. in London. The central bank already holds more than 40 percent of local government bonds on issue, up from 14 percent before it started an expanded debt-purchase program in April 2013. The BOJ is closer to the *limits of their unconventional monetary policy than any other central bank,” Jen said in an interview last week. Once all its options are exhausted, the yen will return to its fair value of around 90 per dollar, he said. The BOJ snapped up more than 1.6 trillion yen ($14.1 billion) of benchmark 10-year bonds in two days this month in an effort to stop yields from rising too far above its target of around zero percent.* Governor Haruhiko Kuroda faces the challenge of holding down borrowing costs just as quickening inflation and an improving outlook for some of the world’s biggest economies push up bond yields around the world. *“Capital flows will be so intense, if the BOJ insisted on keeping the nominal rate anchored, the impact on dollar-yen would lead to other distortions and policy reactions from other countries,” Jen said. “The zero percent interest-rate target will be used and adjusted in the same way that the Fed is adjusting the fed funds rate and the European Central Bank will taper.” ( Bloomberg subtlety annotating this below chart with a subtle drug usage reference, which seems to be a trend as Bill Gross in his February missive describes the Central Banks action as creating a Methadone maintenance situation..... editorial observation by JJP) The yen has strengthened more than 3 percent against the dollar this year even as President Donald Trump accused Japan of devaluing its currency to gain a trading advantage. Trump refrained from criticizing Japan’s currency policy when he met Prime Minister Shinzo Abe in the U.S. this month. The Japanese currency tumbled 13 percent last quarter as the dollar surged amid bets Trump’s program of tax cuts and infrastructure spending will spur the Fed to accelerate rate increases. The yen was at 113.22 per dollar as of 8:25 a.m. in Tokyo Tuesday. Japan’s currency will resume its decline in coming months as the Fed is likely to tighten policy three times this year,* Jen said. Derivatives traders are pricing in a 75 percent chance the U.S. central bank will move by its June meeting. In the next six months, “it’s more about the Fed than Japan or the BOJ,” Jen said. https://www.bloomberg.com/news/articles/2017-02-20/yen-to-hit-bottom-at-120-before-rallying-on-boj-limits-jen-says