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This global markets managing director.
This is uncharted territory for any currency.
Why should our viewers care if they just on stocks this is a look at currency wars right so it's very rare for anyone currency to -- more than 20% against another -- -- -- twelve months.
Think it you have to care.
The -- to 25 is up over 50% for the last year.
If you were you as investor investing and hedged you probably would have only got half of that CD to be currency -- a convention of that that game or.
At least Nikkei 225 names happy and again you're looking at names like come -- -- the heavy machinery company Sony we mentioned Toyota.
You look at those names they're doing beautifully over the past couple of months because of this extraordinarily -- -- but what does that mean for.
What we're looking out with a yen so punched -- a hundred yen per dollar.
That was yesterday now suddenly.
And this caught a lot of people's -- because it affected the treasury yields although they may not have known that.
-- to a 102.
Yen per dollar so weakened even further and what was the reaction in treasury yield -- It was incredible we saw the ten year and the thirty year popped higher.
Considerably so thank -- -- -- that's correct so.
So we now see that ten year yielding.
In the area about 1851871.
Point 9% at the moment we we came off of a very strong or or at least a stronger than expected thirty year option yesterday so that I think that the mood was quite good until we saw this.
Move higher unexpectedly that we feel like.
-- perceive it was what Ben Bernanke said today but he really didn't say anything earth shattering -- a little bit about certain.
Risks in the market but this is not a fear trade as you say you say that there is such.
An exotic financial instrument in Japan that was forced because -- yen went so weak.
To do something talk about that.
So so there's eight exotic structure there called a power reverse.
Okay do currency -- and essentially this is -- something that has been sold to Japanese Japanese pensioners over the course of that the last ten years to take advantage of carry trade.
Well what happens is we blew through 100 in dollar yen.
Those that had sold this note needed to cover hedges and to do so they needed to.
Long dated currencies the interest rate swaps what happened was to do that it pushed up.
The long into the -- so it's a technical and -- -- due to hedging.
They're still very strong demand for our treasury are what are your favorite currencies right now with all of that in mind okay well this is certainly you want to be long everything against the yen the yen is is clearly on it's on its -- -- But Mexico the Mexican peso and last -- -- -- -- here a month ago or so.
We were very bullish -- Mexican peso it -- our -- target.
Below twelve double whoa there's going to be as some profit taking there but I still like the Mexican peso is just going to appreciate the slower pace -- second -- Before we go here your three point simple put them up right now Michael -- also wisdom about currency trading give us your quick points did well.
It currency wars are going to heat up over the course of the summer yen weakness is going to be fought it's going to be -- by emerging markets and you're going to see.
Much like what we saw over night with the South Korean finance ministry they do not want to see the yen weakened against their currency -- -- Michael Woolfolk of -- and -- -- thank you and it does -- -- how.
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