The World of One Trade


A messy chart, for a messy Friday. On here we have USD/JPY, EUR/USD, the offshore Chinese Yuan, the S&P 500, and the US 2s10s yield curve, since Trumpquake. The main point is that yes, they are all one trade, which has no doubt led to the sense that there is indeed a coherent overall macroeconomic thread that connects them all – and that man’s name is Reagan Trump!

We discussed yesterday how there are indeed many themes starting to come out, about the end of QE forever, the return of inflation, and challenges ahead for EM.  These are common themes for many a BM reader. But one thing that does stand out from the attached chart is just how close the USD/CNH and USD/JPY charts are…. drilling down:


Literally tick for tick they move in unison. Could the Chinese intervention to prevent their currency depreciating out of all control be driving the fortunes of the dollar much more than those lovely macroeconomic fundamentals?

Ohhhh let’s see….

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