FXKnowledge chief strategist ACF early Q1 update

FX Knowledge updated macro thoughts:

Important Developments early this year validate our bullish JPY call and confirm a USD bearish m/t outlook.

This has been a busy start to the year for the global market, with the sell-off in the bond market very much in the limelight as the US Treasury 10 year bond yield is pushing back towards last March’s high of 2.6277%.

On the G10 FX front, the JPY is a winner early this year (which bodes well with our December 18 2017 ‘Q1 2018 G10FX Investment Themes and Strategy publication: ‘We still like the EUR, but the JPY could be the ultimate winner’), whilst the equity market is looking a little more vulnerable as monetary policy normalization (and potentially the US debt predicament) become more of a dominant market theme.

Bottom line is that we believe that the recent move higher in US bond yields i) has room to go further and ii) it is not necessarily a bullish development for the USD in the current context.

No news is good news for GBP – Audrey Childe-Freeman on WSJ

Nov 14th 2017 – The pound falls to a three-week low against the euro after the U.K.’s October annual inflation came in marginally below expectations, albeit remaining at a high 3.0%, while strong eurozone data boost the euro. Audrey Childe-Freeman, founder and chief strategist at FX Knowledge, says the pound’s falls show how negative sentiment toward the currency is. “U.K. data could have come in any shape or form and the price action would have been bearish sterling,” Childe-Freeman said. Trading sterling is “all about Brexit,” while investors tend to consider November’s Bank of England rate rise was “just a one off.” She prefers selling sterling against euro, Swiss franc or yen. EUR/GBP reaches a high of 0.8976. (jessica.fleetham@wsj.com)