Something for your Espresso: The End of the Cycle and the Last Man
Good morning from Europe!
It would seem our Japan prediction came to fruition but as I am sure many of you are well aware the price action in FX has been a bit volatile and while the yen has taken a punch as we expected Kanda from the Finance Ministery has managed to calm the Yen sell-off with rhetoric. On the other hand, the BoJ has already piled into JGB’s.
And the market? Still anticipating further selling. We still think that odds are skewed toward a further weakening of the Yen as the BoJ is unlikely to be done with its debt purchases, but we will be following the situation closely in the coming days
Chart 1: Japan, 10Y yields vs 10Y swaps
While the overarching momentum of the economic cycle is undoubtedly disinflationary, the United States stands out as the last man. Meanwhile China is in a crisis of its own. Read our morning report below
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