Dr Aghi mentioned the F word yesterday and today Japan's Aso may or may not have used the F word depending on which news feed, associated translation and following MoF damage control story you would like to believe. But for overall effect Dr Aghi's use was as effective as an F word in a Beckett play, achieving maximum effect with Euro falling, whereas Aso's usage ended up with him being dragged into compliance and given a roasting for damaging the reputation of the "corporate mission statement" as the JPY rallied. The F word of course referring to FX. So if you don't want to be a complete Aso, leave the F word to the experts.
Are we back to watching internecine squabbles within the Euro group over where Euro should be? Predictably Germany's opener with GERMAN GOV'T SPOKESMAN SAYS GERMANY BELIEVES EURO IS NOT OVERVALUED smacks of the old game of corporate squeeze knowing that German corporates are in a stronger position re Euro moves than marginal exporters in France and the periphery. Noise perhaps but with the Macro world quiet it may be a distraction to fill time.
The theme of potential tops, or at least corrective rollovers still intrigues TMM. Having cut our equities at the end of January we have been watching them trace out what almost looks like a square wave form on last week's tic charts with little confirmation either way. FX moves also appear to have flattened off as momentum in Euro and jpy recent moves start to reflect the rangy to soft nature of commodity currencies. We were staring at technicals yesterday and having seen EUR/GBP bust through its recent up trend, noted a USD/JPY doji 2 days ago following a soothsayer signal and a myriad of signals in EUR/USD too.
And the mood? Well the tone of commentaries hitting our inboxes are still massively skewed to "buy the dip". There seems to be little or no appetite (or expectation) for Euro to fall further from here and little belief that the Jpy could possibly rally much further. This leaves TMM, in their normally stroppy bolshie counter consensus way feeling the weak side is the down side in EUR/JPY. So whilst equities decide what they are going to do TMM will continue to punt in FX and the lack of much bounce in EUR/USD, has spurred us to add short Eur/Jpy to our short EUR/GBP from yesterday.
Finally, the comments coming out yesterday from FOMC's Evans reminded us of a very strange twist that supports the theory of Yin and Yang. Every good has an equal bad to counter it. It appears that Evans, who TMM much admire, has a twin living in the UK who is as evil as Evans is good. Can YOU spot the difference between Evans and Ed Balls?
The top picture is of Charles L. Evans, Alternate FOMC member, Chicago
The bottom picture is of Ed Balls, UK labour MP and shadow chancellor.
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