Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Provide Comprehensive Analysis & Commentary

SAV Markets

SAV Markets aims to provide comprehensive analysis & commentary on foreign exchange and asset markets. The approach is multi asset as markets are typically interlinked. Cause and effect are always at work, even if those effects take time to manifest. As nothing is permanent we strive to get ahead of the curve in an ever changing world.

Cross Asset Strategy

<ul>
<li>As we prepare for the FOMC there are patterns to watch beyond the short term</li>
<li>The risk of lower yields still persists, especially given the curve inversion</li>
<li>As a consequence we are likely to see further gains in US equities</li>
</ul>


As we prepare for the FOMC there are patterns to watch beyond the short term
The risk of lower yields still persists, especially given the curve inversion
As a consequence we are likely to see further gains in US equities


<ul>
<li>Is the inflation ship turning? Price action in markets warrants this question</li>
<li>The clearest breaks have been in US stocks which should still rally</li>
<li>Bonds may be the next to move - it is the central market to watch</li>
</ul>


Is the inflation ship turning? Price action in markets warrants this question
The clearest breaks have been in US stocks which should still rally
Bonds may be the next to move - it is the central market to watch


Technical Analysis

This note takes a thorough look, through a technical lens, of major JPY crosses as nearly all show bullish breakouts across the board.When seen in conjunction with rising yields, higher commodity prices, and stable stocks, we get a fuller picture of the reflationary trends that have re-emerged across markets except in Japan where deflationary concerns (even in the face of rising wholesale prices) are never far away. This keeps the JPY the favoured funding currency, as usual.Keep in mind that US yields are likely to continue higher still – the target for US 5-year yield is 1.80% which will probably take a few months to achieve. Such a development would most likely put US 10-year yield well above 2.00%.The only trend, at this juncture, that is beginning to look mature is the rally in Brent Crude, which has effectively met the $85 target area that has been in place for over a month. That does not mean we will reverse but instead could slow down or consolidate ahead of big levels just below $90.

This note takes a thorough look, through a technical lens, of major JPY crosses as nearly all show bullish breakouts across the board.When seen in conjunction with rising yields, higher commodity prices, and stable stocks, we get a fuller picture of the reflationary trends that have re-emerged across markets except in Japan where deflationary concerns (even in the face of rising wholesale prices) are never far away. This keeps the JPY the favoured funding currency, as usual.Keep in mind that US yields are likely to continue higher still – the target for US 5-year yield is 1.80% which will probably take a few months to achieve. Such a development would most likely put US 10-year yield well above 2.00%.The only trend, at this juncture, that is beginning to look mature is the rally in Brent Crude, which has effectively met the $85 target area that has been in place for over a month. That does not mean we will reverse but instead could slow down or consolidate ahead of big levels just below $90.

FX & Rates

Two trends that are becoming clearer in these markets is the rise in yields and the rise in energy prices.Together they spell out a ‘reflationary’ stance which is inter-related to the market preparing for Fed tapering asset purchases. This is further supported by the recent move higher in US breakevens which are now set to trend up. While these may appear to be positive developments and signs of markets moving in the right direction, they do not come without risks.

Two trends that are becoming clearer in these markets is the rise in yields and the rise in energy prices.Together they spell out a ‘reflationary’ stance which is inter-related to the market preparing for Fed tapering asset purchases. This is further supported by the recent move higher in US breakevens which are now set to trend up. While these may appear to be positive developments and signs of markets moving in the right direction, they do not come without risks.

The recent moves higher in US long end yields, when coupled with a stable equity market environment (US), are likely to continue to support USDJPY and probably JPY crosses. USDJPY is strong above 110.70. Nearly all JPY crosses have something that points towards higher levels. AUDJPY and NZDJPY both posted bullish outside days. GBPJPY shows a decent bullish setup but we need to see a break through the 153.50 area. The 5+ figure correction down on EURJPY since June also looks to be over just when we trade at notable levels on EURUSD .While we are still waiting for breaks to be confirmed on many of these crosses, the emerging setups &amp; price action all highlight the risk of higher levels ahead.

The recent moves higher in US long end yields, when coupled with a stable equity market environment (US), are likely to continue to support USDJPY and probably JPY crosses. USDJPY is strong above 110.70. Nearly all JPY crosses have something that points towards higher levels. AUDJPY and NZDJPY both posted bullish outside days. GBPJPY shows a decent bullish setup but we need to see a break through the 153.50 area. The 5+ figure correction down on EURJPY since June also looks to be over just when we trade at notable levels on EURUSD .While we are still waiting for breaks to be confirmed on many of these crosses, the emerging setups &amp; price action all highlight the risk of higher levels ahead.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

EURJPY (EURJPY BGN CURNCY)

"V" For ? Thoughts on Central Banks

Market reactions to the ECB are clear, they are going the opposite way of what policy makers intended. As we prepare for the Fed, some medium term...

Shyam Devani

Cross Markets: Is the Ship Turning?

The inverted curve in the US should NEVER be ignored. Latest indications point to further gains in bonds as well as ongoing gains in equities....

Shyam Devani

JPY Crosses Continue to Trend

JPY weakness continues to come through as reflationary trends re-emerge while Japanese yields remain extremely low thus making the Yen the chosen...

Shyam Devani

Bonds & FX: Navigating Another Taper

As US yield rise with higher energy prices, we attempt to provide clarification in FX markets where some emerging markets are at risk of suffering...

Shyam Devani

FX: JPY Crosses Ready to Move?

Rising yields and stable equities are providing support for USDJPY. JPY crosses are increasingly looking bullish though breaks are yet to be confirmed

Shyam Devani

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)