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/
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/
