Yesterday, I did a hit for CNBC on gold (video here) and I mentioned that big players were dumping when we broke $1,500. Yesterday as well, the SEC released a filing that showed Soros Fund Management LLC lowered its investment in the SPDR Gold Trust, the biggest such fund, by 12 percent to 530,900 shares as of March 31, compared to Q4 2012. Also, Northern Trust and BlackRock dumped around 50% of their holdings. However, the largest investor in the ETF, Paulson&Co., maintained their massive holding of 21.8mn shares of the 353mn shares outstanding. Spot gold is down … …READ MORE

1. Japanese GDP. Abenomics appears to be paying a quick dividend as Japan’s GDP grew at the fastest pace in 12mths. Q1 GDP grew at an annualized rate of 3.5% vse. 2.7% and after growing 1% in Q4 2012. Key to increase: a 3.8% rise in exports and we know that was bolstered by a massive depreciation of the Japanese currency since Abe announced his candidacy would be based on exactly that. On the news, the markets sold USDJPY on the thought that maybe Abenomics will back off the push for further weakness. BTW, a spokesman for China’s Commerce Ministry … …READ MORE

On March 27th, I wrote a blog about how the reduction in equity shares and bond instruments available for investors were contributing to a large rally in both. Today, Reuters carries a similar story entitled, “For all the debt, there’s a shortage of bonds”. In the article, Reuters cites:

• The world’s central banks and commercial banks alone now hold some $24 trillion worth of bonds – or 55 percent of the entire $44 trillion universe of government, asset-backed and corporate bonds as captured by Barclays Multiverse Global Bond Index.
• They hold more than two thirds of the … …READ MORE

1. Nikkei. Clearly, this is the story of the year so far. Today, the Nikkei was up 351 pts. to 15,096 and a stunning 45% for the year! Overnight, the big driver was the Bank of Japan Governor Kuroda saying he didn’t believe the rise in the Nikkei was a bubble. This underscores the fact that the central bank is closely tied to the government and is losing its credibility for independence. This is reflected in the rise in JGB yields as the 10yr yield has soared from 0.35% to 0.86% since April when Kuroda took over.

Nikkei, EuroStoxx, S&P … …READ MORE

Wednesday FX Trade Follow-up

Well, it’s good to leave tight stops! Seriously, almost everything I was anticipating happening came out the opposite today and therefore this GBPJPY trade’s hope rests now on the G8 finance ministers complaining about the weak yen.

Here are the negatives for the trade so far:

China CPI slightly higher than 2.3%.
Article in China Securities Journal say no new stimulus.
BOE didn’t do anything to rates.

Here’s the latest intraday graph.

Source Bloomberg… …READ MORE

1. Chinese inflation. Today, China released their CPI and it was slightly higher than expected. April CPI was up 2.4% vse. 2.3% with core non-food inflation at a subdued 1.6%. PPI fell into deeper deflationary territory, dropping 2.6% and reflects major over-capacity within China’s industrial sector. Also, the China Securities Journal said that Chinese policy makers have reached a consensus that economic growth remains steady and there is no need for new stimulus to spur growth. SHCOMP fell 13pts to 2,232 on the news. (Yes, this is contrary to what I was looking for yesterday!)

2. Bank of England. Today, … …READ MORE

Over the next 72 hours, the biggest events in FX land should be:

1. China CPI (2.3% exp.)
2. Japanese CA/Trade (Y12220bn, -Y274bn exp.)
3. BOE meeting (no chg. exp.: 0.50%, 375bn QE)

This is a relatively light week for economic data and events after last week’s slew of CB meetings and US NFP. We know that RBNZ joined the list of country’s actively managing their currencies as they sold NZDUSD to stop its rally. From Brazil to China to Switzerland, the interventions and manipulations are making it difficult to gauge movements as the core framework for evaluating value is … …READ MORE

1. Nikkei. Again, it rallies, it makes new highs, and it means more are likely to pile in at these levels. 14,285, up 105. I expect this to ease off with the CA/Trade data that should show improvement and less need for fast yen weakening.
2. Reserve Bank of New Zealand. The RBNZ announced that they have joined the currency war battle by intervening to sell NZDUSD. Appearing before New Zealand parliament’s finance and expenditure select committee, RNBZ’s Wheeler said, “There has been some intervention.” NZDUSD dropped from 0.8465 to a low of 0.8360 on the news.

3. China trade. … …READ MORE