Sometimes the weekly view smoothes things over
The underlying them in the market at the moment is volatility. Not the kind of 'volatility' the punters on CNBC complain about whenever there is a hiccup in global stock markets, but the kind of back-and-forth outsized moves that don't make much sense.
The easy thing to point at is year-end and all the money sloshing around. There's no way to disprove that but there are a few things that make me worried.
- Oil's breakdown isn't flows
- Ditto for other commodities
- The way ZAR cracked Wednesday was spooky
- The yuan is bid
- The Fed is coming
So my thinking is that the flows could be for a reason, we just don't know what all the worries are focused on. At least not yet.
In the meantime, the undercurrents are a better look at FX moves since the day after the ECB. I find the whole thing amazing.
A few thoughts:
- The euro is almost precisely where it was after the ECB. Time is running out for a better squeeze.
- NZD -- at the top of the list -- despite a central bank cut
- AUD -- almost at the bottom -- despite a blockbuster jobs report and less-dovish central bank.
- CAD should be no surprise at the bottom. There's no good news in the CAD chart either.
- JPY is the one I find most interesting. The big surprise of 2016 could be yen strength. The Abenomics yen-weakening experiment is over, I think.
