Re: Fw: Gautam:EMEA FX Chartpack: high yielders vs. low yielders divergence [I]
Given the volatile price action in the EMEA high betas (TRY, RUB, ZAR), the below charts may be informative:
- Stretchometer: Price action is certainly stretched (on the weaker side) across the board, but especially in MYR and BRL. TRY ZAR RUB price action is also stretched, but not as much as before the rally over the past two days.
Looking specifically at USDTRY, price action is now stretched to the extent we saw earlier this year and more importantly at the start of 2014 (when the CBT undertook an emergency rate hike).
Key extracted points:
- USDTRY: price action is highly stretched — comparable to levels earlier this year and at the start of 2014 (when the CBT executed an emergency rate hike).
- USDZAR: the "stretchometer" is at 5‑year highs but has retraced over the past 2 days, consistent with a risk‑on appreciation move across EMEA high‑yielders.
The stretchometer for USDZAR is at 5-yr highs, but has retraced somewhat in the last 2 days (in line with the risk-on appreciation move observed across the EMEA high-yielders).
USDRUB price action is also stretched, but we are still far below the 'stretch' levels we have seen in the recent past.
speak later today I am in europe
Thought provoking charts.
Ok. There are two trades I would like you to look at. One a cheap long term play in crude, other a play on global central bank liquidity coming down.