Charts I’m Watching: Apr 21, 2015

USDJPY provided a second ramp job in a row last night, shooting up past the SMA100 and testing the SMA50 — only .32 below the .618 at 120.11.  Note that last night’s move also reenters the broken white channel dating back to December 2014.

2015-04-21 USDJPY daily 0615

The futures like what they see, spiking another 12 points to test the all-time highs.  But, until the red, dashed trend line from October is broken as it was earlier in the month, ES is still in backtest mode. And, according to our analog, it’s premature.  In other words, I wouldn’t chase this move.

2015-04-21 ES daily 0615

The Fed has gone to great lengths to reassure “markets” that interest rates won’t be increasing very much very soon.  From Bloomberg:

Policy makers have ruled out an increase at the next meeting of the Federal Open Market Committee, April 28-29. New York Fed President William C. Dudley stressed on Monday that once they start to lift rates above zero, “we will simply be moving from an extremely accommodative monetary policy to one that is only slightly less so.”

Our view continues to be that there will be no interest rate increase in 2015, in September or otherwise.

Note the 10-yr note yield action over the past month.  The ECB has created conditions where some homeowners with adjustable, LIBOR-based mortgages are being paid by banks to borrow.

Earlier today, the euro interbank offered rate – Euribor – dropped below 0% for the first time, meaning banks are now being paid to borrow.

Does no one remember the trouble that developed about 7 years ago when money got a little too easy and banks started doing some pretty ridiculous things with it?

Meanwhile, the US 10-yr rates are being propped up at 1.85% to give — just like talk of higher rates — the appearance that the US markets are healthy.

2015-04-21 TNX daily 0645

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