Wed 15Sep2010 0343GMT

My focus, if you haven’t picked it by now, is the ES.

Lots of thing impact on the ES price moves, one of them is USD/Yen (especially in this carry trade, risk on/off world).

The BOJ intervened in $/Y today … check out this chart:

USD/Yen .... BOJ intervention

The BOJ returns 2-way risj to the Yen, but don't expect it to last.

Source: Nice clean chart from DailyFX website


This is how you return risk to a market used to going only one way.

FWIW the SNB (Swiss National Bank) had been intervening in a similar fashion to sell Swiss Francs … but after impacts like the one characterised in the chart of the $/Y (above), the CHF soon started strengthening again. FWIW, expect the same sort of move in the Yen.

On the ES:
Jon Hilsenrath has 2 articles on the WSJ site today, both intimating that there will be nothing of note in the way of action from the Fed. at the forthcoming FOMC on Sep. 21.

Given this intervention on the Yen is significant new information today I am going to hang off on talking about the models. The ES has traded up a little on the BOJ action, but its the middle of the night in the US so at the very least I will be waiting until mid-morning in London to make any reasonable assessement of the impact on the ES.

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