EUR/USD 1.2473 up 0.0035.
From ValueWalk:
Unlike the ECB, the Bank of Japan "WILL do whatever it takes"
Investors who are focusing on action in the euro / U.S. dollar are missing the point, the real future action is going to be found in the yen / U.S. dollar currency pair, says a Societe Generale research report from the uber bear, Albert Edwards.
Albert Edwards on the most important chart
Saying the market still does not seem to have grasped the significance of this phase of currency wars, Societe General analyst Albert Edwards says the most important chart investors should focus on is yen/dollar. “It reminds me of the 2006/07 period when falling US house prices and then widening corporate bond spreads were totally ignored by upbeat equity investors until it was too late,” he wrote.
When providing analysis, Edwards observes a peculiarity found in much of the financial forecasting industry is that strategists, for fear of making a bold but incorrect market call, never like to predict too far from the current spot rate “despite consistent evidence that markets are far more volatile than their mundane forecasts ever suggest.”
Why does this happen? “The reason is obvious – strategists don’t like putting their necks on the line only to be wrong and have it cut off,” Edwards says, as he makes a bold yet logical call on the yen / U.S. dollar relationship. “Better to get just the direction of the markets move right, rather than attempt to forecast the magnitude.”
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