Blog about the art of making money: February 2014

Thursday 27 February 2014

only two scenarios and nothing more

hello,

The title does not lie. Indeed, it seems to me that these are the only two possible scenarios. Sure immediately noticed that, ultimately, both scenarios predict a continuation of the upward trend in the coming months.

Regarding the first scenario <chart 1>, in the case that correction consists of three waves should see a strong reflection in the areas of 2412 points or 2380 points.

chart 1. scenario 1, fWIG20 Index H4, 2014-02-27

On the other hand <chart 2>, if the observed shape of the correction was to adopt expanded five, in the worst scenario, it is possible to going down even in the region of 2200 points. It is worth noting at this time observing the behavior of the SP500 Index, I believe that such behavior is unlikely. But it is always worth to remember.

chart 2. scenario 2, fWIG20 Index H4, 2014-02-27

In the event that the market is heavily geared to growth, very difficult to reach even those levels which are closest to the spot price. Therefore, you should watch the market and when you decide that this is already the moment invest.

best regards,
oscarjp

The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects oscarjp-chrimatistikos current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.

Tuesday 25 February 2014

What further with the dollar?

hello,

During the weekend summit of G-20, head of the European Central Bank, told reporters that the March meeting of the Bank may prove to be one of the more important this year.

He hinted that the ECB is not going to be passive, but to react even in situations where the potential risk of deflation may (but need not) materialize. He added that in March, the Bank will have adequate information to make a potential decision. Of course, this does not mean that the March 6 will cut interest rates, but the probability of such a movement has grown.

For now, investors seem to ignore the risk - yesterday we met a better reading of the German Ifo Index (increase in February to 111.3 pts.). The impact was also published by Eurostat, which showed that HICP inflation across the euro area was finally 0.8 percent. y/y in January, compared to 0.7 percent. y/y in the first reading. However, the inflation will start to come back on Thursday, when it will begin to flow from the morning preliminary estimates from Germany (first of the Länder), and on Friday we will get the data for the whole euro area.

Record gap, I note between the market interest rate and the pair EUR/USD looking at the long-term comparison. <chart 1> However, it has been realized that you need to put into practice the expectations of a rate cut by the ECB.

chart 1. EUR/USD & FRA rate, 2014-02-25

Both short-and long-term rate contracts show that the EUR/USD should be currently around 2 figures below.

chart 2. EUR/USD & short and long-term rates, 2014-02-25

At the moment, however, I recommend small positions. If the German inflation disappoint, you will have to invest more aggressively on the ECB's interest rate cut.

regards,

oscarjp

Sunday 23 February 2014

18. Summary of the trades (February 1st, 2014 - February 15th, 2014)

hello All,

I know it's been a long time since the last summary. Therefore, I believe it is the perfect time for a summary of all transactions and recommendations presented in the first two weeks of February. The delay was due to the start of preparation to the CFA (Chartered Financial Analyst) exam. In the coming months, certainly I will devote a lot of time to prepare to the exam but of course I will not forget about your blog posts.

Returning to the main thread entry. In the last statement, I left open 3 transactions (more info in the table in statement No. 17) <link>.

Unfortunately, definitively all transactions were closed at the levels where I have set the stop order. Trade on the gold market has brought a loss of 16.4 points

In addition, in February I published two entries, which concerned the EUR/USD and fSP500 Index.

trade 1

trade 2

Both transactions were aimed at the initial stage in the designated direction. For EUR/USD were already earning one figure in comparison to the levels of the transaction.

Always I decreased a Stop Order to levels that bring minimal profit. And, unfortunately, in the case of these two transactions, "market" came to these levels by closing my transactions.

Summary of trades

If in any case expressed vaguely or you have any additional questions. Please feel free to send me. All asked I will gladly answer.

best regards,
oscarjp

Wednesday 19 February 2014

Summary statements by members of the FOMC before Minutes

hello traders,

Today at 20:00 Polish time we met minutes of the last FOMC meeting, which took place late last month. Then the Fed decided to once again reduce the asset purchase program by another $ 10 billion to $ 65 billion per month.

Here is an expression of individual members of the Committee, which took place after the January meeting. They were divided into different categories. And at the bottom I place the most important issues of Minutes.

Asset purchase program QE:

Richard Fisher (Dallas) - Until we see clear signs of economic weakness or a significant deflation, I will vote for further QE by a further reduction of $ 10 billion (14.02)

Janet Yellen - If the incoming information will support the expectations of the committee as to improve the situation on the labor market and the return of inflation to the long-term goal, the committee probably will reduce the asset purchase program at their next meetings. (11.02)

Eric Rosengren (Boston) - We are still far from the historical levels of use of labor resources and as a result is expected that those responsible for monetary policy will focus on the problem (05.02)

Charles Plosser (Philadelphia) - I would like to early termination of QE (5.02)

Dennis Lockhart (Atlanta) - I look forward to the end of the asset purchase program in Q4 of this year. (5.02)

Jeffrey Lacker (Richmond) - would have to be significant complications to pause pace cuts program. (4.02)

Charles Evans (Chicago) - Cutting a further 10 billion is a good option to reduce the chances of the program and in the coming months. (4.02)

Esther George (Kansas City) - FOMC will continue its policy as long as GDP and employment growth will slow and inflation will remain low. I am afraid that this action may have significant long-term costs. (31.12.13)

Interest rates:

Yellen - We need data to support the consideration of interest rate increases.

Rosengren - The stabilization of interest rates, the best way to strengthen the economy.

Lockhart - In my opinion interest rates should remain at their current levels.

Plosser - should complete the asset purchase program to consider raising interest rates.

Lacker - There will be a surprise, the FOMC will not raise interest rates.

Evans - Interest rates are at their current levels since 2008 and should be so for some time.

Forward guidance:

Bullard - Because of the the lower levels of the unemployment rate, I believe that we should return to a more traditional policy.

Plosser - There was no information about what the reaction after exceeding 6.5%. Information related to the fact that it will not increase before reaching this level.

Lockhart - The policy objectives require revision, access to the level of 6.5% is a good argument for that.

Lacker - FOMC should update the message to be able to effectively assess the policy.

Fisher - We need to update the forward guidance targets.

Inflation:

Bullard - expect a rise in inflation in 2014.

Yellen - Inflation below the target of FOMC, mainly due to temporary factors.

Rosengren - Low inflation allows you to keep interest rates at low levels, which accelerates the growth rate of the labor market.

Lockhart - expected inflation at 2%.

Evans - Low risk of high inflation. I fear that inflation will not rise in the near future.

Fisher - I do not fear that inflation is below 2%. The economy is expanding, while not causing inflation.

Emerging markets:

Yellen - The situation in emerging markets do not pose a real threat to growth in the U.S.. Regularly observe changes in these markets.

Lockhart - I do not think emerging markets have an impact on the economic situation in the U.S..

Evans - Forward guidance can mitigate the impact of EM on our economy.

Lacker - We focus on our situation. We are up to date with the problems of EM, but the way in which these countries deal with the problems depends on them.

Bullard - We do not see the possibility that these events have had a real impact on the United States.

----------------------------------------------------------------------

FOMC minutes - the most important conclusions:

- The economy will grow at a moderate pace;

- Some members of the Fed believes that weather factors are detrimental to economic growth;

- The risk of inflation remaining below 2%;

- Several members sees the need of raising interest rates before the middle of this year;

- Members of the Fed acknowledged that inflation will slowly come back to 2%, but a few members want to closely monitor inflation;

- All members agreed that the improvement in the labor market is evident and should be small steps to limit QE3;

- All members agreed to move away from numerical targets for forward guidance;

- Worse readings payrolls probably in part due to extremely bad weather.

best regards,

oscarjp

Monday 17 February 2014

fSP500 Index - short-term direction

Hi,

On the chart below, there are my currently observation for futures market on the SP500 Index. This is a signal, typically short-term with a very close stop loss level 3 - 4 points above the spot price.

Potential target that can be achieved is difficult to estimate at the moment. Therefore, you must observe the behavior of the market.

After all, I'll risk and give you a couple of targets.

If the market will prove to be strongly weak and reach levels of 1,804 points. Then, will have to close half of the position and possibly overcome the strong levels of 1800 points to open additional short positions.

chart 1. fSP500 Index, H1, 2014-02-17

In addition, I add interesting fact. To reflect :)

A curious finding emerged in the latest 13F by Soros Fund Management, the family office investment vehicle managing the personal wealth of George Soros.

Actually, two curious findings: the first was that the disclosed Assets Under Management as of December 31, 2013 rose to a record $11.8 billion.

The second one is that the "Soros put", a legacy hedge position that the 83-year old has been rolling over every quarter since 2010, just rose to a record $1.3 billion or the notional equivalent of some 7.09 million SPY-equivalent shares. Since this was an increase of 154% Q/Q this has some people concerned that the author of 'reflexivity' and the founder of "open societies" may be anticipating some major market downside.

Then again, as a percentage of total AUM, the put position rose to 11.1% of his notional holdings. By way of reference, as of June 30 2013, his SPY put may have had a smaller notional value, but it represented both more shares (7.8 million), and was far greater as a % of AUM, at 13.5%.

Finally, remember that what was disclosed on Friday is a snapshot of Soros' holdings as of 45 days ago. What he may or may not have done with his hedge since then is largely unknown, and since there are no investor letters, there is no way of knowing even on a leaked basis how the billionaire has since positioned for the market.

trade safe,

best regards,

oscarjp

Eurogroup Meetings - no any news.

hello,

Today, there was a meeting of Eurogroup in Brussels. The Eurogroup, the main forum for the management of the single currency area, is an informal body that brings together the finance ministers of countries whose currency is the euro. The Commission’s Vice-President for Economic and Monetary Affairs, as well as the President of the European Central Bank, also participate in Eurogroup meetings.

The Eurogroup’s role is to ensure close coordination of economic policies within the euro area. It also aims to promote conditions for stronger economic growth, as well as to promote financial stability. The Eurogroup usually meets once a month, on the eve of the meeting of the Council of the European Union (Economic and Financial Affairs - ECOFIN).

The Eurogroup adopts its work programme every six months. Each programme defines the main areas of focus and sets preliminary agendas for the upcoming Eurogroup meetings. These agendas are tentative and may change.

OK, so much theory enough. Now we focus on what has been said today.

Of course, as is very often the most attention to the media gave Ewald Nowotny (ECB):

- "the primary objective of the ECB must be price stability";

- "there is no risk of deflation";

- "inflation could be below 2% in 2016";

- "The ECB is discussing, over a wide range of possible actions" (boring);

- "negative deposit rate is one of the possibilities";

- "The ECB does not cut off the deposit rate without lowering the other interest rates";

- "The ECB is still discussing the negative deposit rate, but it is still on its introduction has not decided";

- "is too early to say what factor could decide to introduce a negative deposit rate".

Summing. Any updates. The probably until the ECB's will not know th new inflation projection for the euro area do not take any decision. At the next meeting of ECB Mario Draghi is in possession of such knowledge, only then we can expect to make a decision.

Important words uttered also Olli Rehn (ECB):

- "recovery in the euro area remains moderate";

- "necessary to further economic reforms";

- "Troika returns to Athens in coming days";

- "In March we will see a new review of the situation in Greece";

- Italy is in the interest of reducing the public debt, I am convinced that Italy will continue to reform fiscal policy".

Today was to be made the return date Troika to Greece. According to the media should be made as soon as possible and should be Troika in Greece to 10 March, at the next meeting of the Eurogroup.

Greece still wants to cut the debt (redemption of bonds issued by Greece), but yesterday Angela Merkel explicitly ruled out such a possibility.

regards,

oscarjp

Sunday 16 February 2014

Selling More CDS on Europe Debt Raises Risk for U.S. Banks

hello,

full access to this article on Bloomberg <link>

I decided to put this information on my blog because I believe the risk of default of Greece's quite possible. And, unfortunately, seems to me that the world had forgotten about the fact that Greece is not better. Recent statistics have shown the highest unemployment rate in the history of the country: 28 percent. Among people between 25 and 30 years, unemployment is over 55 percent.

These are just some of the information from the article. Full text in the link at the top.

"U.S. banks increased sales of insurance against credit losses to holders of Greek, Portuguese, Irish, Spanish and Italian debt in the first half of 2011, boosting the risk of payouts in the event of defaults."

"Guarantees provided by U.S. lenders on government, bank and corporate debt in those countries rose by $80.7 billion to $518 billion, according to the Bank for International Settlements. Almost all of those are credit-default swaps, said two people familiar with the numbers, accounting for two-thirds of the total related to the five nations, BIS data show."

"The payout risks are higher than what JPMorgan Chase & Co. (JPM), Morgan Stanley and Goldman Sachs Group Inc. (GS), the leading CDS underwriters in the U.S., report. The banks say their net positions are smaller because they purchase swaps to offset ones they’re selling to other companies. With banks on both sides of the Atlantic using derivatives to hedge, potential losses aren’t being reduced."

"Five banks -- JPMorgan, Morgan Stanley, Goldman Sachs, Bank of America Corp. (BAC) and Citigroup Inc. (C) -- write 97 percent of all credit-default swaps in the U.S., according to the Office of the Comptroller of the Currency. The five firms had total net exposure of $45 billion to the debt of Greece, Portugal, Ireland, Spain and Italy, according to disclosures the companies made at the end of the third quarter. Spokesmen for the five banks declined to comment for this story. "

"While the lenders say in their public disclosures they have so-called master netting agreements with counterparties on the CDS they buy and sell, they don’t identify those counterparties. About 74 percent of CDS trading takes place among 20 dealer- banks worldwide, including the five U.S. lenders, according to data from Depository Trust & Clearing Corp., which runs a central registry for over-the-counter derivatives."

"In theory, if a bank owns $50 billion of Greek bonds and has sold $50 billion of credit protection on that debt to clients while buying $90 billion of CDS from others, its net exposure would be $10 billion. This is how some banks tried to protect themselves from subprime mortgages before the 2008 crisis. Goldman Sachs and other firms had purchased protection from New York-based insurer AIG, allowing them to subtract the CDS on their books from their reported subprime holdings."

regards,

oscarjp

Monday 10 February 2014

EUR/USD where next ?

In connection with the entry of a few minutes before <"Draghi's worth knowing words"> I would like to introduce my opinions about the current situation on EUR/USD.

No action by the ECB and the worse than expected data regarding the change in the number of jobs in the U.S. nonfarm, led to the rise of EUR/USD.

At weekly intervals presented the probable area of support <1.3654-1.3670> where the market should turn back <chart 1>.

chart 1. EUR/USD weekly, 2014-02-10

In addition, I present the opinions of selected investment banks.

Deutsche Bank:

"The ECB left policy unchanged last week, seeing rates sell-off and the euro rally. This notwithstanding, the risks to Eurozone inflation and divergent monetary policy between the US and Eurozone are still worth around 10 big figures lower in EUR/USD this year.

The pushback to this argument is that while Eurozone inflation has fallen, the ECB’s reaction function remains insufficiently aggressive to push down rates far enough, meaning that real yields continue to benefit the euro. Indeed, regressing G10 FX performance with real yields this year, the euro appears bang in line. Much will therefore depend on the determination of the ECB to tackle disinflation from here on in.

What next? The market will need to be convinced that the ECB are determined to tackle Eurozone disinflation. The tenor of data over the coming month will matter (this week’s GDP release will be closely watched), but we may need to wait for the March meeting for any clear direction in the euro. Our economists note that staff forecasts for 2016 will be vital in shaping the Governing Council’s attitude to inflation."

Barclays:

"We continue to expect a rate cut at the March meeting, though we now think that a negative deposit rate is less likely. But we now see a higher probability that the ECB refrains from further sterilisation of SMP holdings," Barclays clarifies.

"By the March meeting, the ECB will have seen more data, including information on credit flows. President Draghi highlighted that banks have most likely been window dressing ahead of the AQR, so they want to see the new data on lending to see whether the bank’s deleveraging has a special seasonal component to it," Barclays adds.

Credit Agricole:

The EUR has been supported of late, mainly due to a less dovish than expected ECB press conference and because weaker than expected US labour data may have increased uncertainty among investors regarding the Fed’s stance on reducing QE further. However, we do not expect the latest labour data to have a sustainable currency impact. This is especially true as the latest data may be strongly affected by bad weather conditions.

Elsewhere, ECB President Draghi stressed that more evidence of worsening conditions is needed before additional policy action is considered. However, we stick to the view that the ECB will act again should inflation expectations fall further. This in turn should keep both investors’ ECB rate expectations and the single currency capped.

Elsewhere, the German Constitutional Court will issue its OMT-related ruling on 18 March. We do not expect demand for the EUR to rise strongly ahead of the ruling. This is especially true as any negative outcome would be to the detriment of both equities and the EUR. It must be considered that asset allocation flows towards EUR-denominated risk assets have been one factor limiting currency downside.

trade safe,
best regards,
oscarjp

Draghi's Worth knowing words.

hello,

Draghi disappointed in February many economists, who were counting on a further reduction of the interest rates, or at least another form of monetary easing. The message which flows from the ECB, however, has not changed significantly.

The situation before the meeting of the ECB was unusual. On the one hand, the official consensus is not assumed changes of interest rates, on the other hand, market voices said that some form of easing is expected and a reduction of the reference rate (currently 0.25%) was in a sense expected that the Bank Council had to choice. Why? For a long period of time, the market rates in the euro zone were close to zero, even when the reference rate (basic) was 0.75%. At the same time, however, the deposit rate was already at 0%, and a large excess liquidity in the market caused that market rates were close to the deposit rate. However, in recent weeks, liquidity has decreased considerably, to a large extent by the stress tests, which are carried by ECB. So we can say that the Bank inadvertently led to monetary tightening. Now, to make loosening, does not have to lower the deposit rate to the controversial negative levels, but enough that lowered the reference rate to 0.1 or 0.15%. However, the ECB did not.

Initially the message of the President seemed to be firmly hawks and positive for the euro. Draghi ignored lower inflation in January, indicating that "this is the effect of energy prices and does not affect the expectations of the ECB in the medium term." The market reacted big jump quotation of EUR/USD pair from the area of 1.3480 to 1.3615. In contrast to the January conference, Draghi did not refer also to market interest rates in the euro, which would suggest that at this moment it is not very worrying for the Bank. However, it is worth noting what the president said in the second part of the conference. Answering questions repeatedly emphasized that the Council needs more information and indicated that the next meeting will have new ECB projections of economists, including already containing indications for 2016. He added that the ECB is willing and ready to act. Therefore, investors should not be deceived hawkish tone from the beginning of the conference - he justified the lack of activities with a high level of expectations. But this is not the beginning of a bull market for the euro.

Non-Farm Employment Change:

Next low growth in the number of jobs and a further decline in the unemployment rate. If this keeps up, you may find that at the March FOMC meeting Jannet Yellen will formally consider a raise key interest rate (because the objective will be realized in the unemployment rate), and will not reduce even QE (because the pace of job growth will be too slow).

Let me remind, the change in employment is assessed among entrepreneurs: the report showed employment increased by only 189 thousand. in the past two months. The unemployment rate is calculated based on a survey of households. This study showed at the same time a decrease in unemployment of 605 thousand., Which resulted in a decrease in the unemployment rate from 7 to 6.6%. It is of course impossible, either examination shows the statistical error, the only question is which one? Or maybe both?

Foreign Exchange Market:

Low interest rates in the U.S., Eurozone and other developed markets have consequences for the global economy. Easy access to the money in the world markets meant that corporations from emerging markets willing to emit Eurobonds and into debt in foreign currency. In 2010, the value of the issue of such securities amounted to 151.5 billion USD, and already in 2013 was carried out bond issues with a value exceeding 335 billion USD. According to the BIS, the increased issuance of bonds has no positive correlation with the increase in exports. Enterprises use from cheaper financing only, do not make international expansion. Data presented in the table below, indicates that access to cheap money using mainly the Asian countries. Data relate to bonds, and Asian countries such as Korea and Singapore have a higher rating than for example Turkey, is why corporations of these economies is easier to issue bonds. The increase in foreign debt makes the companies and countries are more vulnerable to changes in the exchange rate and capital outflows. This can quickly lead to financial crisis the economy.

The second consequence is the inflow of corporate deposits to local banks. Deposit funds by corporations are more pro-cyclical than other types of deposits, is why in times of distress market or economic downturn, commercial banks will have to deal with the sudden outflow of capital, which can lead to liquidity problems.

chart 1. Issue of bonds by emerging markets according to the countries

chart 2. Yields of local EM gov. bonds and the exchange rates

best regards,
oscarjp

Wednesday 5 February 2014

The day of firing New York FX Traders on Wall Street

hello Traders,

Deutsche Bank, Citigroup and Goldman Sachs are those banks that today has fired FX traders. Deutsche Bank has fired three currency traders in New York. Citigroup and Goldman Sachs have lost senior executives in their foreign exchange businesses as regulators worldwide ramp up their investigations into potential manipulation of the $5-trillion-a-day foreign exchange market, according to a person briefed on the matter.

The three employees Diego Moraiz, Robert Wallden and Christopher Fahy include the head of Deutsche Bank’s emerging markets foreign exchange trading desk in New York and two traders, said the person, who was not authorized to discuss the matter publicly.

The terminations come as authorities around the world, including Britain's Financial Conduct Authority and the U.S. Justice Department, investigate possible manipulation in the $5.3 trillion-a-day global forex market.

Moraiz, who had been with Deutsche Bank since 2004 and is close to 50, was the head of its emerging markets foreign exchange trading desk and specialized in trading the Mexican peso. He was a managing director, and the most senior of the three traders to be terminated on Tuesday.

Anil Prasad, who has served as global head of Citigroup’s foreign exchange and local markets operations since 2008.

Steven Cho, global head of the Group of 10 nations spot and forward trading at Goldman Sachs in New York. Cho joined Goldman Sachs in 1996 in London and later relocated to New York. He has been a partner at the bank since 2010.

In the last two years, banks have combined to pay more than $5 billion in fines related to manipulation of the London interbank offered rate, or Libor, and other benchmark interest rates.

At least 10 people in Britain and the United States are facing criminal charges related to Libor. The first criminal case in Britain is expected to go to trial next year.

Regulators in Britain, the United States, Germany, Switzerland and Hong Kong have started investigations into the currency markets in the last year, all of which are in the early stages.

More than a dozen foreign exchange traders at some of the world’s largest banks, including Barclays, UBS and JPMorgan Chase, have been placed on leave over questions about whether they colluded to manipulate benchmark currency rates.

This week, the Lloyds Banking Group placed a senior currency trader on leave as part of its own internal investigation, according to people briefed on the matter.

In January, Citigroup fired the head of its European spot currency trading desk after he was placed on leave last year.

"nature, does not like a vacuum"

regards,

oscarjp

Sunday 2 February 2014

17. Summary of the trades (January 17th, 2014 - January 31st, 2014)

Hi,

In the analyzed period, we managed to close the two trades on the fWIG20 Index.

trade 1, dated 4 January 2014

trade 2, dated 22 January 2014

Both, have proven to be profitable trades. The total profit amounted to 189 points.

Unfortunately, we had less luck on transactions published yet in the previous statement. Unfortunately, the market reacted strongly to the partially negative economic data from the United States which led to the overcome of our stop levels. As a result, our profit on both transactions decreased to 43 pips.

Now let's get to the transaction, which at the moment we are still open.

Namely, a short position on fSP500 Index which I mentioned already in at least a few of my entries.

open trade - fSP500 Index (SHORT)

At the moment, I expect a correction, which should not overcome 1,800 points. I hope, so :p

And of course, another trade on EUR/USD. Quick entry from the morning and the development ideas in the evening.

SHORT EUR/USD - morning

SHORT EUR/USD - with my conclusions

Move these could already earn 200 pips but I believe that the market is not yet said the last word.

And, finally, my last trade dated 27 January 2014 on the GOLD market. More info here: <GOLD trade>

Summary of trades

comments are welcome :)

regards,
oscarjp

What I expect regarding the USD/JPY

hello,

Last week we published a lot of data from the Japanese economy. Most of them turned out to be really good, which should be reflected in the strengthening yen:

- The unemployment rate fell from 4.0% to 3.7% (consensus 3.9%);
- Inflation increased from 1.5 to 1.6% (1.5%);
- Production increased from 4.8% to 7.3% (7.3%);
- PMI rose from 55.2 to 56.5 points;
- Number of construction of new homes increased from 1,037 million to 1,055 million, and the November data was revised upwards;
- Growth in car production rose from 10.2 to 12.2%

Almost all readings positive for the yen. Only core inflation in Tokyo for January (0.3%) and consumer spending (+0.7% y/y) were lower than expected.

chart 1. USD/JPY Daily, 2014-02-02

According to the analysis presented in the chart I expect in the coming weeks strengthening of the Japanese yen.

The reasons why such a scenario is to realize are several:
1. strengthening of the U.S. dollar against the euro;
2. very good macroeconomic data for the Japanese economy;
3. confusion with emerging markets: the bankruptcy of Argentina, Greece, capital flight from Turkey (The trade deficit in December amounted to 10 billion USD) and capital flight from Hungary. Intervention in the foreign exchange market in Croatia;
4. correction of SP500 Index.

regards,
oscarjp