Reversal of Fortunes - Short CHFJPY

23 lis 2023

CHF has clearly outperformed against JPY - due to rate differentials. However, with rate peak expectations in place for majority of the economies - alongside slowing GDP growth for Swiss, JPY looks like a clear alternative relative to other countries - which would likely work even during period of crisis (both are safe haven classes).

Looking at a RR of ~2:1 across 3-6mths.

It is highly critical to factor in catalyst for taking a long position on JPY due to negative carry. Views that CBs are planning for rate cuts limits potential downside, and any optimism in Japan Data or Pessimism in Swiss data would drive the trade.

30 lis 2023

Uwaga

ways that this trade can do well:

1) rate hike expectations for Japan increase/materialize

2) expectations for other countries (in this case, Switzerland) rate hike decreases/rate cut materializes

4 gru 2023

Uwaga

Weaker CPI for Switzerland (1.4% vs 1.7% est) likely to fuel increased rate cut bets/lower expectations for rate hike for Switzerland -> weakening prospects for CHF.

11 gru 2023

Transakcja zamknięta: osiągnięto wyznaczony cel