Coming to the end of the month…

Approaching the end of the month and facing the expectation of today’s Bank of Japan (BoJ) interest rate decision and monetary policy statement, we update a couple of topics:

  • BoJ announcements have been both benign and malign for ARION in the past. For instance in September the lack of credibility of the BoJ governor’s speech and the JPY whipsaw price movements led to the 2nd worst drawdown period in ARION’s history. But there has been also many neutral and/or benign events to ARION around the BoJ announcement This is even more important when USDJPY is a core instrument traded by ARION. All things considered, we decided to keep business as usual and we hope BoJ will be, one more time, benign to ARION. If not, and if BoJ surprises against the opened positions or, worse, announces a non-credible monetary policy change, that makes JPY prices jump around, we know our journey is made of ups and downs, and we will have to be exposed to the downs to get the more interesting ups.
  • The “worst” market day so far in 2017 took a toll in what was being so far a quite competent month. At this moment, the monthly return is still interesting and above our long term target but, of course, nobody likes to give pips away. The 3 independent strategies that contribute to diversify ARION, united all together this Monday and all took away precious pips from the accumulated stock, which is annoying being so end to the month, but that’s just how markets work. The 3 strategies work to diversify ARION ion but even so, there are times where all of them work in the same (negative) direction and even taking the same view in the same currency pairs, it’s normal.