I think this BOJ reaction, unlike past reactions, will end up being wrong.
CAT warning along with Komatsu and price action in Terex doesn’t look bullish.
Top 10 global pumpkin producing countries
China and India are the world’s top pumpkin producers, by a huge margin.
Short CADJPY at 108.90
Stop loss 110.26
Cut GBPUSD by 11am
Long 10DEC EURMXN
18.70/18.20 put spread
~50bps EUR
off 19.16 spot
October 31, 2023
I don’t think Jim Cramer is a reverse indicator. In fact, the ETF that attempts to capitalize on that theory is losing money.
Obnoxious and expensive
Cramer is just a loud guy that makes a ton of calls. He is a mirror reflecting the zeitgeist. The fact that he is talking about US refunding, and the fact that I felt compelled to include it in my weekly calendar (see end of am/FX) is probably a sign that we are at or near peak treasury angst.
Meanwhile, USDJPY did the thing it does around BOJ meetings. Down in NY, then up through and after BOJ. Here are the last three BOJ meetings.
So the immediate reaction from the market here is that this is just like the other BOJ meetings. But I don’t think that is the case. US yields are not going up this time, so there’s a disconnect. The BOJ policy change had no impact on US yields this time. Unlike the other times.
Things get even crazier if you look at CADJPY.
The Canadian economy is tracking for back-to-back contractions in Q2 and Q3 and things are getting worse, not better as mortgage resets loom over the 2024 outlook. I think this spike in USDJPY is an opportunity to sell CADJPY because today’s move is a simple reaction to unwind the selling of USDJPY after the Nikkei leak and with Canadian yields at multi-month lows, it’s unlikely that CADJPY will continue much higher.
At the same time, the GBPUSD trade I have on is stale as month end is about to be over and I don’t want that trade through FOMC or Bank of England later in the week. As such, I’m switching out of the short GBPUSD trade between now and 11 am WMR for what will likely be a small loss and into short CADJPY with a stop at 110.26. As usual, trades are in the sidebar.
Here is a video of Stan Druckenmiller and Paul Tudor Jones via NJ.
At right, this week’s calendar.
Have a spooky day.
Halloween is essentially a gimmicky holiday in China and lots of bars, pubs, and restaurants will use Halloween as a theme night. If you’re visiting China during Halloween, you’ll probably only find these parties in larger cities that are more expat-friendly such as Beijing, Shanghai, and Guangzhou. Source
This piece is mostly for people who are interested in backtesting
