Trading the rouble has historically been popular with hedge funds using it as a proxy for oil prices. But Stephen Jen, of the hedge fund SLJ Macro Partners, argues that “the currency may have a good chance of decoupling from oil,” judging it to be overvalued chiefly because of Russia’s persistently high inflation.
Archive for November, 2013
“Emerging market countries have done virtually nothing since then to put themselves in a better position when a taper comes, and if anything more speculative capital has gone into these markets, making these currencies even more vulnerable to a sharp selloff,” hedge fund manager Stephen Jen of SLJ Macro Partners told clients in a note.
“Actual or expected tapering will be positive for the dollar. Further delays of tapering will alter the path but not the ultimate level of the dollar: higher than here,” said Stephen Jen, co-founder of London-based investment firm SLJ Macro Partners.
In an attempt to quantify the Fed effect, Stephen L. Jen and Fatih Yilmaz of SLJ Macro Partners LLP found the U.S. central bank has been three times more important in determining how stocks trade in the past 10 years than it was from 1980 to 2002. They compared the influence of the Fed’s interest-rate, money-supply and exchange-rate tools against that of inflation, corporate profits and economic growth.
On average, the Fed’s policy stance explains 40 percent of the variations in equity prices, compared with corporate profits, which explain just 15 percent of share swings, London-based Jen and Yilmaz wrote in an Oct. 30 report.