#BOJ meeting has become more important than CPI data, Jobs Data. And the FED meetings. 10yr JGB swaps are at 1% vs 50bps YCC. The 10yr JGB yields spiking abv 50bps intraday she be ignored since they are borrowed shorts in 10yr series 100% owned by the BOJ.
I am betting that they do NOT increase they do NOT abandon YCC and they Do NOT raise the rates. basically they status QUO - 180 degree view of the mkt.
If they remain status quo, end up with tons of Widow traders on the street. In such a case the USDJPY will rally (JPY depreciates). This view is being expressed by being short JPYINR (my position)
If they abandon YCC and raise the band then it becomes a never ending cycle. The BOJ owns 50% of the 300% Debt to GDP. Even if the BOJ losses, this will continue a vicious cycle where the market will keep forcing the BOJ to raise rates yet again. This will drive deflation.
Also, there is NO CAP on where the market can take these rates (double digit on JPY JGBs ??) and this will create a death spur all GSECs globally. This would create a massive tightening of financial conditions.
This will also drive the DXY downwards and the Commodities will rally more.
THIS IS SUPER SUPER IMPORTANT. Pls RETWEET
BANG ON 🎯 An entirely Non-consensus call.
BUT BUT BUT Wait…. A FULL picture will ONLY emerge after all of 👇 below events …. So hold your horses
@ 15:00 jst mkt close
@ 15: 30 jst Gov Kuroda Press Conf
@ Fri 11am, Kuroda✈️Davos
BUT BUT BUT Wait…. A FULL picture will ONLY emerge after all of 👇 below events …. So hold your horses
@ 15:00 jst mkt close
@ 15: 30 jst Gov Kuroda Press Conf
@ Fri 11am, Kuroda✈️Davos
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