Sunday January 31, 2016 - 13:27:23 GMT
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EXCLUSIVE: Reaction to BOJ Ease Will Fade Quickly
John M. Bland, MBA, CTA
I have been asking myself what has changed with the BOJ decision. Negative interest rates only apply to a narrow slice of bank deposits at the BOJ and and as for the additional QE, the yield on the 10-yr JGB has fallen from 0.22% to 0.10%. None of us are banks and those who were investing at 0.22% are unlikely to be impacted by a 0.10% yield. The BOJ decision was all about headlines. I think the impact of the headlines should wear off quickly.
I make most of my trading decisions based on the technical, but use the fundamentals mostly to set my trading bias. I am still no longer comfortable with the strong dollar theme. I think that time is over, but I don\'t want to get ahead of the markets and will be letting the price action in forex, bonds, equities, (and oil?) dictate when the time is right to start selling the USD again. I still feel the EURUSD pair is headed next to a 1.10 to 1.15 trading range but I will be patient before I act.
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