This chart from today's Early Look by Keith McCullough shows the recent divergence between the Nikkei (going up) and Japanese Government Bonds.
The BOJ (Bank of Japan) RAISED RATES overnight, from -0.1% to a range of 0.0 to +0.1%. Plenty of “Discretionary Macro” Managers thought that would equate to Nikkei Down, JGBs (Japanese Gov Bonds) Down, and Yen Up.
"A lot of hedge funds shorted the Nikkei, bought the Yen and shorted JGB," McCullough said this morning on The Call @ Hedgeye. "You know what happened? 3/3 of those things were dead wrong."
The Nikkei ramped +0.7% higher, JGB 10yr Yield DROPPED -3 basis points to 0.73%, and then Yen broke TREND Support vs. USD with a -1.0% decline.
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