# Look for EUR-YEN as Global Share Market Indicator



## josjes (29 February 2008)

some tidbit that you may find useful. 
Wow, that easy huh. Just look at the trend of EUR-YEN then you know where we are heading. 

The most amazing statistic you never heard, according to Ken Fisher, chief executive of Fisher Investments and Fisher Wealth Management, is the year-to-date daily correlation between ups and downs in the global stock market versus spreads between the yen and the euro: 93 per cent, or “beyond eye-popping”, Fisher notes in the FT’s Insight column on Tuesday.

On days when the euro rises against the yen, stocks rise. On days when the yen rises to the euro, stocks fall. This year’s daily yen/euro changes perfectly track this summer’s stock market correction and subsequent resurrection. Make a chart of stocks, then the yen/euro spread; slip one on top of the other, and they are virtually indistinguishable.

It ‘s all driven by the yen carry trade financing the global bull market. Yet, notes Fisher, “if anything torpedoes this bull market, it will be a rising yen, probably driven by Bank of Japan monetary tightening”.

The correlation of the MSCI World to the yen/sterling spread is lower, at 0.75, but is still sky-high. To the Australian dollar it is 0.86 and to the Canadian dollar 0.81. All breathtakingly high. Only to the US dollar, which everyone fears, is it materially lower at 0.37.

For full article :
http://ftalphaville.ft.com/blog/2007/11/13/8823/ken-fisher-it’s-the-yen-stupid/


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## Kauri (1 March 2008)

But how to get a tradable signal/indication from the correlation.. does the eurjpy follow the sharemarket... or vice-verca?? is there a lag either way to allow positioning before the move??? or just another observation that may be interesting...
I have been following the $US index to get an idea of future direction.. the break from what looks like an EW W4 triangle was timely and enabled positioning prior to ..for example.. last nights fall..
Cheers
.........Kauri


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## Trembling Hand (1 March 2008)

Kauri said:


> But how to get a tradable signal/indication from the correlation.. does the eurjpy follow the sharemarket... or vice-verca?? is there a lag either way to allow positioning before the move??? or just another observation that may be interesting...




Exactly. 

These things are nothing more than interesting observation. Its not like the share market follows the next day. Many markets move in tandem.


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