USDJPY falling, because of Treasury buying?
Private foreigners have purchased just over half a trillion - yes, Trillion - LT USTs in the past six months (sorry, no #brettonwoods3)
Why such huge demand for safe, liquid US$ instruments? Not a whole lot of trust for the Fed's toolkit and use. © Jeff Snider
What is the reaction to buying UST's? The yields come lower. Interest rates come lower.
What does the Fed do? Follows the markets.
We're seeing a drop off in the US 10 Year Yield and this is also part of a wider yield curve inversion in the eurodollar market. Inversions signal troubles ahead, so anyone with money goes to the safest assets. Namely sovereign bonds and ultimately US sovereign debt.
The USDJPY has been tracking the move of US10Y and also either accelerated or decelerated depending on whats going on in the oil markets.
Japan is heavily dependent on importing energy, so a higher Oil price means the Japanese economy gets crushed and the yen drops. Oil prices are coming lower at present.
Why such huge demand for safe, liquid US$ instruments? Not a whole lot of trust for the Fed's toolkit and use. © Jeff Snider
What is the reaction to buying UST's? The yields come lower. Interest rates come lower.
What does the Fed do? Follows the markets.
We're seeing a drop off in the US 10 Year Yield and this is also part of a wider yield curve inversion in the eurodollar market. Inversions signal troubles ahead, so anyone with money goes to the safest assets. Namely sovereign bonds and ultimately US sovereign debt.
The USDJPY has been tracking the move of US10Y and also either accelerated or decelerated depending on whats going on in the oil markets.
Japan is heavily dependent on importing energy, so a higher Oil price means the Japanese economy gets crushed and the yen drops. Oil prices are coming lower at present.
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