Accordio to David Scutt, Market analyst, over the past 20 days, USD/JPY has logged correlation coefficients with yield spreads between U.S. and Japanese bonds—ranging from two to 10-year maturities—of between 0.76 and 0.82. While that’s similar to earlier this year, what stands out now is that it’s not just rate differentials USD/JPY has been closely tracking. Its correlation with market pricing for Fed rate cuts this year has strengthened to 0.82 over the same period.
Scutt saids that, combined with stronger relationships with riskier asset classes—such as Nasdaq 100 futures—and measures of expected market volatility like VIX futures, this suggests USD/JPY has increasingly become a play on risk aversion over the past month, coinciding with softening U.S. economic data and wobbles in U.S. stocks.
Technically, Jpy is still at bearish trend, were wed can soon begin a contracting triangle ( according to relativity Elliot theory) finish wave 5, and then begin a deep correction.
Scutt saids that, combined with stronger relationships with riskier asset classes—such as Nasdaq 100 futures—and measures of expected market volatility like VIX futures, this suggests USD/JPY has increasingly become a play on risk aversion over the past month, coinciding with softening U.S. economic data and wobbles in U.S. stocks.
Technically, Jpy is still at bearish trend, were wed can soon begin a contracting triangle ( according to relativity Elliot theory) finish wave 5, and then begin a deep correction.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.