What to expect this week
I have put some
relatively detailed thoughts together on the event risk I am focused in the
week ahead, which will be dominated by the UK election and managing exposures
ahead of the 15 December tariffs deadline. The FOMC and ECB meeting and US CPI
would usually be huge event risks, but this time around they take a backseat.
For those, who just
want to see the implied vols and moves, and not my dulcet tones on a Friday
afternoon, here is the data. I do explain the chart in more depth in the video
if you are lost on how to interpret.
I wanted to leave
off on this chart below, which looks at USDJPY (red) vs the US-Japan 2-year
bond yield spread. Granted, correlations come and go but these jaws need
closing and USDJPY seems to be ‘expensive’ against one of its key drivers over