Crossroads Ahead

The interplay between USDJPY and oil has been fascinating to watch.  The yen carry trade used to be the primary driver of algos and, thus, equity prices.  But, CL officially took over on Feb 11, 2016 and, despite the inflation complications it has engendered — not to mention a bearish channel breakdown and some of the worst fundamentals on record — it’s having a hard time letting go.

With CPI reaching 2.5% in January, and the year-over-year numbers set to look worse for February, what can we expect from oil and, thus, equities?

Can USDJPY find its feet, and can VIX be hammered strongly and frequently enough to offset the impact?

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