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DB Inverse Japanese Govt Bond Futs ETN Message Board

  • bobby2loaves bobby2loaves Jan 19, 2013 6:04 AM Flag

    Why is this not reacting to the FX rate?

    The Yen has been sinking like a stone against the dollar for the past 2 months, yet this triple short JGB ETF is down over that timeframe, while JGB 10-yr interest rates are relatively flat?

    I thought this vehicle was supposed to capture the change in exchange rate of the yen vs. the dollar. So if the Yen is down 10%, shouldn't this ETF has risen 10% in the past 2 months, instead of sitting flat?

    It looks like the Japanese are going to do a lot of printing to get out of this mess, and destroy the Yen. If this ETF can't capture that kind of action, but only captures actual interest rates and/or defaults, it isn't as robust as I imagined.

    Thoughts?

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