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  • #221
  • May 15, 2006 2:40pm May 15, 2006 2:40pm
keep the faith merlin, don't chicken out before my target is met!!!
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  • #222
  • May 15, 2006 2:56pm May 15, 2006 2:56pm
usd still flat at 5.25 for jun. here is the jun 06 cot chart.

the smart traders are the larger traders (green line)..volume on the up, yen being accumulated.

i think you could hold out for more merlin...you've waited 6 months now so don't bail out too soon!!!
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  • #223
  • May 15, 2006 8:36pm May 15, 2006 8:36pm
Quoting Isotonic
keep the faith merlin, don't chicken out before my target is met!!!
what is the target?
Relax and be happy.
  • #224
  • May 15, 2006 8:38pm May 15, 2006 8:38pm
Quoting Isotonic
the jun 06 contract has gone past 0.25% for the yen so expect a rate hike within the next 4 weeks...you heard it hear first people!!! (i hope i don't have to eat this words though if i'm wrong though! : )
i gotta stick my neck out, in spite of the fedfund futures, and say bernanke will hold rates. its dependent on the data though, lets see what ppi and cpi have in store for us this week. if they are tame i expect at least a one-meeting pause.
Relax and be happy.
  • #225
  • May 15, 2006 8:38pm May 15, 2006 8:38pm
Quoting Isotonic
usd still flat at 5.25 for jun. here is the jun 06 cot chart.

the smart traders are the larger traders (green line)..volume on the up, yen being accumulated.

i think you could hold out for more merlin...you've waited 6 months now so don't bail out too soon!!!
nice, where did you get that COT indicator?
Relax and be happy.
  • #226
  • May 16, 2006 1:41pm May 16, 2006 1:41pm
see post 238 - i said around 107...

Quoting merlin
what is the target?
  • #227
  • May 16, 2006 1:43pm May 16, 2006 1:43pm
this is where i may or may not agree (or disagree?) merlin...
why bother having an opinion at all, just see what the futures are doing!?!

they're saying once he pauses then that's gonna be it for a while...i hope i've got my chart reading right here (otherwise it's more red faces from me! : )

look at the time series for the gbp and usd earlier in this thread dude...

Quoting merlin
i gotta stick my neck out, in spite of the fedfund futures, and say bernanke will hold rates. its dependent on the data though, lets see what ppi and cpi have in store for us this week. if they are tame i expect at least a one-meeting pause.
  • #228
  • May 16, 2006 1:45pm May 16, 2006 1:45pm
you need to follow mudd around the forum, he came up with the link...i was on the lookout for free data as always (i know once a cheapskate,...:)

http://www.timingcharts.com/index.aspx

Quoting merlin
nice, where did you get that COT indicator?
  • #229
  • May 21, 2006 3:28pm May 21, 2006 3:28pm
Quoting merlin
its dependent on the data though, lets see what ppi and cpi have in store for us this week. if they are tame i expect at least a one-meeting pause.
the very hawkish ppi and cpi have changed my mind on this, btw.
Relax and be happy.
  • #230
  • May 21, 2006 3:31pm May 21, 2006 3:31pm
Quoting Isotonic
see post 238 - i said around 107...
good thing i didnt listen to you!

dont ask me how i timed the yen exit...there was certainly some luck involved

the way the yen is falling right now, i may make another go of this long yen trade. if i can pick it up around USDJPY 114 i would be VERY happpy to do so.
Relax and be happy.
  • #231
  • May 21, 2006 3:33pm May 21, 2006 3:33pm
Quoting Isotonic
why bother having an opinion at all, just see what the futures are doing!?!
i see what you are saying, and i agree to an extent. but the futures do change, many time drastically, so why does it hurt to attempt to predict the change?
Relax and be happy.
  • #232
  • May 21, 2006 4:18pm May 21, 2006 4:18pm
[quote=Isotonic]you need to follow mudd around the forum, he came up with the link...i was on the lookout for free data as always (i know once a cheapskate,...:)

http://www.timingcharts.com/index.aspx[/QUOT

aRE THE cHARTS THAT YOU USE ON THE ABOVE LINK REAL TIME, i HAVE BEEN LOOKING FORM BOND DATA ,BUT THE BEST I CAME UP WITH WAS BLOOMBERG WHICH IS DELAYED BY 15 MIN

THANKS VINN
  • #233
  • Jul 9, 2006 9:55pm Jul 9, 2006 9:55pm
As I'm sure many already know, there is a good chance the BOJ is going to raise the interest rate this Friday.

To the best of my understanding, Japan is finally beginning to recover from the crash of thier early 90's bubble economy, hence the interest rate hike. As well, I assume that because of this foreign countries and investors will be more keen to invest in the Japanese economy. Of course, this is good for Japan and should lead to the Yen increasing in value. (short USD/JPY)

I've looked over previous data and found that when a country's rates are increased, sometimes its currency gets devalued (ex. On 06/08, the E-12 rate went up to 2.75, which produced a great opportunity to go short on the Euro or on 06/29, the FOMC raised the rate to 5.75 which produced a good trade against the US Dollar) but sometimes it increases in value (ex 03/28, the FOMC raised the rate to 4.75 which produced a good trade for the dollar).

This leaves me with two questions..

1) Can anyone give any insight as to why an interest rate hike will sometimes increase or decrease a currency's value?

2) Is my basic understanding of the Japanese economy and the Yen anywhere close to being correct?

Thank you.
  • #234
  • Jul 9, 2006 10:11pm Jul 9, 2006 10:11pm
Quoting dnash
1) Can anyone give any insight as to why an interest rate hike will sometimes increase or decrease a currency's value?

2) Is my basic understanding of the Japanese economy and the Yen anywhere close to being correct?
1) Interest rates are only one component of an exchange rate. Many other factors can and will contribute to a price move. It is also highly dependant on what the expectation for a rate change is. If the majority of players are expecting a 50bp move and a 25bp occurs, the currency will fall. Likewise a surprise rate increase will cause the currency value to rise.

In short, your looking at a single (fairly arbitrary) data point. You need to add the context that the data points fits into to determine what kind of effect it will engender.

2) Yes.
  • #235
  • Jul 10, 2006 5:14am Jul 10, 2006 5:14am
Quoting Darkstar
1) Interest rates are only one component of an exchange rate. Many other factors can and will contribute to a price move. It is also highly dependant on what the expectation for a rate change is. If the majority of players are expecting a 50bp move and a 25bp occurs, the currency will fall. Likewise a surprise rate increase will cause the currency value to rise.

In short, your looking at a single (fairly arbitrary) data point. You need to add the context that the data points fits into to determine what kind of effect it will engender.

2) Yes.

Great answer Darkstar!
  • #236
  • Jul 10, 2006 10:51am Jul 10, 2006 10:51am
Sometimes people buy on rumor and sell on fact.
  • #237
  • Jul 10, 2006 7:58pm Jul 10, 2006 7:58pm
Nikkei wobbles, NK troubles, Fukui fobbles, do you think the nation of the rising sun is ready for a interest rate hike when most of the world is facing a possible deflationary threat. And when the FED signals that it might be over with rate cuts. Gee wiz, I guess Japan will have negative interest rates, when the FED/USA is trying to cut rates to get out of the deflationary spiral. Just shows how weak the yen might get. Japan has to be careful, as the rest of the world does too, in trying to fight inflation, they might precipitate a deflationary spiral.
Price is the only indicator.
  • #238
  • Jul 12, 2006 7:43am Jul 12, 2006 7:43am
Another thing to watch for carefully that will take many by suprise if it happens.

Japanese people/press are talking about Fukui's moral obligation (certainly not a legal one) to resign over his hedge fund investments that were revealed when Murakami was charged with insider trading. Reporters in the Japanese press are expecting that this BOJ meeting would be the right time for that to happen.

To the Japanese press (and public for that matter) regardless of the fact that Fukui had no legal guidance, nor requirement to do anything about his investments after becoming governor of BOJ. Most believe he should have sacrificed his potential for investments and went into all cash mode or a blind trust (which is nearly impossible to access here in Japan).

We had a huge discussion about this today in my office. Two foreigners and a older Japanese banker guy. The Japanese attitude certainly took me by suprise.

To a foreigner, this attitude just doesn't make any sense. If you are reading the English press, they haven't been reporting the angle that he should resign at all. Indeed they are mostly proclaiming that it wasn't really his fault. Our attitude is if they want people in positions like him to have no investments or a blind trust, then they should make it a legal requirement. However to the Japanese, there is less explicit regulation and more public/moral regulation and obligation.

The stupidest part to us outsiders it that the whole government is doing just like Fukui. It certainly points to the need for greater change in the system ... yet the Japanese would rather have only Fukui do the right thing and voluntarily resign while leaving the system alone for other high ranking financially related officials. It's just a corrupt place in many ways that is not reconized by many outside the system due to its inaccessability.
They only act when such an embarassing situation becomes so openly obvious to everybody and then they gang up in a brutal way.


Bottom line: prepare for the possibility that Fukui will resign and what that could mean for end of ZIRP as he was seen as a primary driver of it.
  • #239
  • Jul 12, 2006 4:18pm Jul 12, 2006 4:18pm
Anyone wanna talk about thier strategies for trading the rate announcement??
how bout the reaction to trade balances tonight and how u might trade that announcement. assuming that people will be watching that as a posible influnce of the meeting in asia in the wee hours.
Profit is where readiness meets Opportunity
  • #240
  • Jul 12, 2006 7:45pm Jul 12, 2006 7:45pm
good point opportunist... i think we could all use a little discussion; if there is a rate hike, but fukui resigns... what will happen? an overwhelmingly positive sign, but something very negative as well...?

i actually do not trade the yen, but i probably will for this announcement, as its likely going to be positive for the yen, and ill just join in the wave of yen bulls... but something interesting; usually preceding interest rates announcements traders will begin to price in a hike. but the yen's upside has been very limited. just a thought
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