FX Comment: tapernomix

A journey of a thousand miles begins with a single step.


THE week has arrived – to taper or not to taper seems no longer a question. The market is now poised for a mini one, USD 10-15bn, to be announced on the 18th. As hoped for, the USD tapered last week, the question is how much, if more, to go. Now is the time to pull out the most important chart – the USD Treasury yields have been increasingly closely more correlated with the USD yields this year, and were the key trigger for EM, in particular Asian and LatAm, selloff. The market (spec futures) is net short Treasuries most in 3 years, and still net long USD. The risks are clear. The world is waiting!

Read the full report: FX Research



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