Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Cross Asset Strategy

While the Kospi Index is only marginally below the trend highs, the developments on JPYKRW warn of something more serious ahead. A breach of 10.43 on JPYKRW and 3,205 on the Kospi Index, if and when both seen, would be important developments.

While the Kospi Index is only marginally below the trend highs, the developments on JPYKRW warn of something more serious ahead. A breach of 10.43 on JPYKRW and 3,205 on the Kospi Index, if and when both seen, would be important developments.

Kospi Index - Emerging Concerns Beneath the Surface

Since the release of US labour market data yields have slipped. Notable price action has unfolded for only the third time since yields peaked in late March, which indicates lower yields still.Additionally, USDJPY has faltered, which is consistent with the signs in fixed income markets.But how low is low? Could this just be a short lived and relatively meaningless move down in yields or could we see US 10Y yield below 1.46% and US 30Y yield below 2.15%?

Since the release of US labour market data yields have slipped. Notable price action has unfolded for only the third time since yields peaked in late March, which indicates lower yields still.Additionally, USDJPY has faltered, which is consistent with the signs in fixed income markets.But how low is low? Could this just be a short lived and relatively meaningless move down in yields or could we see US 10Y yield below 1.46% and US 30Y yield below 2.15%?

Cross-Asset Liquidity Strategist, CrossBorder Capital

Michael J. Howell

Cross-Asset Liquidity Strategist

Implementing Research Using Alt Data & AI

CrossBorder Capital

CrossBorder Capital is a London-based independent investment advisory firm. Founded in 1996, it exploits a gap in the investment arena by focusing on Central bank liquidity. 

It specialises in the monitoring and analysis of global liquidity flows - an important determinant of asset prices, from currencies through to bonds, equities and real estate.

CrossBorder Capital implements its investment strategy and currently manages over US$ 350m.


<ul>
<li>Asia forex market volatility falls to near 40-year lows</li>
<li>Notional Asian ‘Euro’ trading within narrow band since 2016</li>
<li>Yuan positioning like Deutschmark within the Euro ‘Euro’</li>
<li>China well-served by such arrangements</li>
<li>Implies as USD devalues Asia gains liquidity and Europe loses export competitiveness</li>
</ul>


Asia forex market volatility falls to near 40-year lows
Notional Asian ‘Euro’ trading within narrow band since 2016
Yuan positioning like Deutschmark within the Euro ‘Euro’
China well-served by such arrangements
Implies as USD devalues Asia gains liquidity and Europe loses export competitiveness
 

The Asian ‘Euro’ (¥¥): Does It Already Exist?

Is it still the time to be defensive on equities and have a notable allocation in Bonds as was described in the note from 11 May (see <a href="https://www.smartkarma.com/insights/us-equities-time-to-get-defensive" target="_blank" data-smartkarma-citation="insights:51332" rel="noopener">US Equities: Time to Get Defensive</a>)?Whichever chart we look at across markets - whether in fixed income, commodities, foreign exchange, or equities - the signs are clear…stay long bonds (Treasuries) in this environment for the short term.

Is it still the time to be defensive on equities and have a notable allocation in Bonds as was described in the note from 11 May (see US Equities: Time to Get Defensive)?Whichever chart we look at across markets - whether in fixed income, commodities, foreign exchange, or equities - the signs are clear…stay long bonds (Treasuries) in this environment for the short term.

After a period of correction and consolidation over the past few week, it is becoming clearer that a base could be forming on US 30 year yield.Key downside pivots at 2.20% were, and remain, important to watch. So far the supports are holding the market. Focus however is now shifting to the key level above at 2.32%, especially as many industrial metals have rallied.

After a period of correction and consolidation over the past few week, it is becoming clearer that a base could be forming on US 30 year yield.Key downside pivots at 2.20% were, and remain, important to watch. So far the supports are holding the market. Focus however is now shifting to the key level above at 2.32%, especially as many industrial metals have rallied.

Japan

The Japanese yen is the official currency of Japan. 

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Kospi Index - Emerging Concerns Beneath the Surface

Is the FX market giving more potent signs for South Korea? A breach of 10.43 on JPYKRW and 3,205 on the Kospi Index, if and when both seen, would...

Shyam Devani

Bonds & Commodities: A Picture Unfolding

The price action in Bonds and the emerging picture in major commodity markets all point towards lower yields. Breaks are yet to be confirmed though...

Shyam Devani

The Asian ‘Euro’ (¥¥): Does It Already Exist?

An Asian 'Euro' may have already formed? If correct there are huge implications for asset allocation, such as buying Asian stocks and European bonds.

Michael J. Howell

Bonds: All Charts Lead to Me

As we look across financial markets, there is an increasing degree of conviction that higher [US] bond prices and lower yields are likely to be...

Shyam Devani

Bonds - Clear Levels to Watch

Having tested important pivots around 2.20%, we are now seeing a picture that points to higher yields again. Key levels in both directions are...

Shyam Devani

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