Do Spirals Still Work?

Or do the MoneyPrinting Pumps trump all?


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The S&P has disengaged from the EURJPY rate. We had speculated before that the EURJPY rate was in turn driven by the ration of BOJ to ECB balance sheets.


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Interestingly, while US stocks have disengaged from that EURJPY rate, they remain closely tied to the ratio of the balance sheets. In fact, the ratio of the BOJ to ECB sheets has risen sharply recently, right in line with this strong S&P rally. The suggestion here is that Japanese printing is still driving stocks, even if the relationship with the EURJPY exchange rate has broken down.

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