With USDJPY refusing to back down either in price terms or intellectual bandwidth expended, we take a closer look ‘under the hood’ using our suite of quantitative tools to more objectively assess the current set-up. What would it take to turn the tide in price action? Is there anything actually ‘macro’ to this move? Have we been here before?

MXN sold off massively following the Mexican election last week but we still view the MXN as a clear-cut ‘trade balance’ play. As long as the trade ties between China and the US increasingly necessitate a ‘value-add middleman,’ Mexico remains in an advantageous position, regardless of whether the president is Sheinbaum or Obrador. 

Using a Principal Component Analysis (PCA) model to analyze assets across financial markets provides a powerful framework for investment decisions. By mapping out the macro anatomy of a given asset, PCA identifies key trends and underlying patterns that influence price fluctuations and market dynamics.

Our updated state-of-the-art Central Bank Sentiment indicators are flagging important changes in communication dynamics since the beginning of the year. We recently upgraded our sentiment measurement to a more fine-tuned and nuanced NLP model that effectively captures the meaning of Central Banker rhetoric and here share key findings.

In addition to trading the FX market from a rebalancing of FX hedge perspective, there exists another approach that also yield consistent returns over time. This approach is highly trading-oriented and tactical in nature, as it aims to extract value from the intraday market from a mean reversion perspective.

Real money investors holding foreign assets must hedge their FX exposure and adjust their hedge as the value of their foreign holdings fluctuates. Our proprietary FX-hedge rebalancing model captures exactly this.