EUR/JPY – The Ultimate Risk Off Trade
We have begun to observe the emergence of short EURJPY exposures bubble up in macro books.
Market spotlights
EUR/JPY – The Ultimate Risk Off Trade
EURJPY, the ultimate barometer of global risk taking, is the benchmark indicator for the "carry-trade".
During the GFC, the cross moved from a peak of 170 to 112; this forced liquidations to cascade globally, intensifying the historic collapse of the global equity market.
In 2012 the EURJPY bottomed near 94 amidst the Eurozone Sovereign Debt Crisis.
In August 2024, the JPY violently rallied against all global FX crosses after the BoJ surprised the market with a 0.25% rate hike, which spurred on a brief global capital markets rout.
As markets become potentially more volatile over the coming weeks/months/quarters, never take the EURJPY cross off your watchlist.
This commentary is for informational purposes only and is not a solicitation. Past performance is not indicative of future results. Opinions expressed are those of Masterpiece Advisors, LLC as of the date of this commentary and are subject to change.
Weekly market notes every Friday from Aaron Sweeney after the closing bell.