Category: Euro

They are driving this car, not cycles, not seasonals, not your favorite indicator.

Some interesting charts this evening showing relationships between central bank balance sheets, foreign exchange rates, and the S&P 500.

click chart to enlarge

The Money Printing Pump chart I show frequently does not factor in the Japanese printing. This chart of the ratio of Japanese central bank assets to European central bank assests shows how the S&P pullbacks align with pauses in Japanese printing.

click chart to enlarge

The long-term relationship between dollar yen and relative Japanese and US money printing remains intact. The Japanese are printing faster than the US, hence their currency is falling. A light pause in that ratio recently has seen a pullback in dollar yen.  

When the FED is out of bullets to fire, they re-load with words.

click chart to enlarge