Forex Flash: Trade easing cycle by shorting funding USD, JPY and GBP – JP Morgan

FXstreet.com (Barcelona) - JP Morgan analysts are not surprised with the decent bounce in stocks and USD sell-off vs most currencies (JPY excepted) as markets are being moved by central bank easing: "No wonder: this week's FOMC statement and next Thursday's Bank of Japan meeting should guarantee at least $1.3trillion in asset purchases next year, a 10% annual increase in the stock of central bank assets", wrote analyst John Normand. However, balance sheet expansion still means more for asset prices (higher) and currencies (lower trade-weighted USD & JPY) than they do for growth. In conclusion, Normand advises to stick with trades which benefit from this ongoing easing cycle (short USD, JPY and GBP as funding currencies).