Leading Indicators Pointing to Trend Shift, Currency Pointing to Policy Shift

While most are transfixed on the market averages, the biggest markets in the world as volatile today, some is pretty easily understandable from our perspective, some may be bigger than we currently realize...

Currencies...

 I'm a bit surprised to see the EUR/USD up like this and it's not just on a weak $USDX, I assume this is on the Ukraine cease-fire which is more a "Cold War II cease-fire" between Russia and Europe, but with Greece in the wings, it's not what you might expect, especially after the strong statements (read between the lines) regarding yesterday's Emergency EU- Fin-Min meeting, TOTAL FAILURE, but keep a happy face on as Greece just needed an expansion of the ECB's Emergency Lending today (think Greek deposit withdraws).

 The USD/JPY heading sharply lower, this is obviously in reaction to overnight statements from the BOJ that additional stimulus may be counter-productive.

The preeminent Carry trade, often leveraged at 100:1 may be about to go VERY wrong for FX traders. hedge funds and anyone else in the carry.

 Yen futures this morning...

$USD is getting smacked hard

Treasuries...

Despite the strong auctions, this rise in treasuries may cause some concern when looking at market averages alone, however as a Leading Indicator (remember Treasuries move opposite yields), this isn't surprising at all as a leading indicator and considering we needed T's to pull back to be accumulated on the cheap, it seems that this part of the process is done and now we are getting the leading signals (see below)...

 30 year Treasury futures (again, remember yields move opposite Treasury prices above).

10 year Treasury Futures, also up on the bad macro economic data this morning.

 However when we look at Yields as a Leading Indicator, this plunge in 30 year yields may seem unsightly to those just looking at the market averages' price today vs. Yields, however for us , using this as a leading indicator as usual there's a different message...

Here 30 year yields (red)  lead the SPX (green)  to the left and are leading the SPX again to the far right as shown earlier and starting yesterday.

10 year yields (red) intraday vs the SPX/SPY (green) plunging...

However for our purposes as a leading indicator, again they led the market higher in a small divergence to the left ad are leading it lower now.

While Euro action is a bit off and I can only surmise that it's relief at the Putin statement of a Ukraine cease-fire in effect Sunday, ramping down European/Russian tensions (although the last cease-fire never ceased firing), it's a bit surprising considering Greece and the EU, both of which are not moving off their talking points a bit, despite pleasantries likely aimed at stemming Greek bank outflows.

The big question and potential game changer in the Yen and BOJ policy. Years ago I wrote that the market would be seeing a major move lower at the same time as the Yen strengthened and gave a lot of reasons, but it's not that hard to figure out why (from QE ending or toned down to the Carry Traders being annihilated if the BOJ pulls an amateur move like the SNB, even if they don't and give ample warning as it seems they are doing, it's a crowded trade...

Things could be getting interesting not only very short term (as is the current /3rd cycle/bounce of 2015 reversing), but on a much larger sense as the world's central banks seem to be in a race to debase while the biggest serial debaser is suddenly changing their tune and nearly running side by side with the F_E_D as far as policy or perhaps "intended policy"...

I believe the BOJ just put the market on notice today.