Japanese Yen falling to lowest levels against the U.S. Dollar since the BOJ intervened last year
150 level approaching fast 👀 Meanwhile, The Bank of Japan announced an extra bond-buying plan for this week as a global debt selloff forces policymakers into the market to curb sharp increases in yields. The BOJ will purchase extra amounts of 5-to-10-year debt on Wednesday as it strives to slow rising yields that are at the highest level in a decade. The benchmark 10-year maturity climbed to 0.775% Monday, a level last seen in 2013. Japan’s 20- and 30-year yields are at similar peaks while Treasury yields also keep moving higher. Japanese sovereign yields have risen as speculation grows the central bank will end its negative interest rate sooner rather than later, while the US Federal Reserve will also keep borrowing costs high. The BOJ has already conducted three unscheduled buying operations since late July to manage yields after adjusting policy to let them rise more. Source: Barchart, Bloomberg
Global currencies vs. the dollar last 10-years % change
Source: Charlie Bilello
HAVE YOU EVER HEARD ABOUT DE-EUROIZATION ?
Based on SWIFT international payments, we are witnessing 'de-euroization' and not 'dedollarization. The euro's share in SWIFT global payments has dropped to 23% from 38% at the start of the year. Are Russia's SPFS and China's CIPS eating up the euro? Meanwhile, China's share in SWIFT payments reached an all-time high of 3.47% in August. Source: HolgerZ, Bloomberg
Markets summarized in one chart: Yields up, USD up and Equities down
Source: Game of Trades
OIL AND THE DOLLAR SQUEEZE...
Most think oil up must be accompanied with the dollar trading down, but the latest surge in oil has taken place with the dollar squeezing hard as well. Source: TME
The attractiveness of cash in a multi-asset portfolio (%)
Source: SG, TME
China Gold Premium to the rest of the world hit a new record of $120 an ounce as Beijing defends yuan
Gold in China is trading at a record premium to international prices, a sign of Beijing’s escalating battle to defend its currency. Bullion on the Shanghai Gold Exchange traded at a premium of more than $120 an ounce on Thursday, according to calculations by Bloomberg. That’s the highest since the exchange was founded over two decades ago, as a weak yuan drove up prices in recent weeks. Source: Bloomberg
EURUSD pair continues a bearish trend after ECB hike
EURUSD stays on a rather bearish EUR bullish USD trend which wasn’t helped by today’s ECB decision to increase rates by another 25bps. Shortly after the ECB’s announcement, US PPI came out slightly higher than expected which led the pair to reach a low of 1.0656 before stabilizing around 1.0675.
Support: 1.0650, 1.0605, 1.0560
Resistance: 1.0720, 1.0770, 1.0810
Source: Bloomberg
