Month end, ECB and NFP, G20 - No lack of events

* Quick feet - position changes
I have already taken profit on my long Usd/Try, Eur/Pln, Eur/Huf and Eur/Sek positions. Looking to reinstate the positions again on any end of month currency strength. I have added to my long Eur/Usd gamma, long Nzd puts/Usd calls as well as added to my long Eur/Chf gamma by buying more Eur Calls/Chf puts.

With month end in process and the calendar full of events, I will remain light on my feet in order to capitalise on quick changes. The markets are still thin and nervous - please mind the gap(s). Pardon the punt.


*Was covert Jpy "intervention" taking place overnight via institutional investors?
With the heavy Jpy selling by Japanese institutonal investors it would not seem an unlikely proposition. With the Japanese fiscal year ending today, a weak Jpy is necessary to avoid foreign currency asset writedowns. This seems now to have been achieved. As I have pointed out in earlier daily pieces, a weaker Jpy was more likely towards this fiscal year end rather than the usual seasonal Jpy strength.

The Jpy development in April should be very important for several reasons, will the fierce Jpy outflows continue or will the Japanese plans to attract capital for domestic investments work? Equity markets and others should pay attention as the outcome will likely affect the volatility level as well as direction of assetmarkets. On top of what was mentioned on yesterdays daily in terms of measures to bring Japanese capital back to Japan, Japanese authorities are now alledgedly considering a 12 Trn Jpy stimulus package. 131 in Eur/Jpy is an important level and potential carry traders should watch that level. Correlation break ups have also hit the Jpy and portfolio flows are now the most important variable for Jpy direction.


*SNB and quantitative easing going forward
SNB are battling the fundamentals in their quest for a quantitative easing policy.
If the SNB is serious about their commitment to quantitative easing, it will have to continue to involve weakening their currency, the CHF, due to the shortcomings of the Chf bondmarket, liquiditywise. With the Swiss rates already at rockbottom and the KOF still at record lows, additional stimulus measures are likely to be considered. As a not irrelevant spinoff, a weaker Chf will likely at least somewhat decrease loanlosses from the CEE countries. I am positioned for a weaker Chf.


*G20
There are hardly any positive expectations left for the G20 meeting by now. Any expectations that the G20 will be able to achieve anything at all are very low. On the positive side, any non negative surprises or outcomes might even be a positive to the market.

As always, good luck




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