Flash: Decline in AUD/JPY not yet over - BoA

FXstreet.com (Barcelona) - „The US rates vol has emerged and will likely remain a pivotal driver for all markets, write David Woo and Ruslan Bikbov, FX and rates strategists at Bank of America Merill Lynch.

„However, the number released last Friday on the May nonfarm payrolls data is unlikely to silence the market speculation on tapering, Woo and Bikbov think, which implies "the balance of risks for US rates vol continues to favor the upside" they wrote.

One clear implication of this ongoing repricing of US rates vol, in view of the strategists, is the underperformance of carry trades, "with the decline in AUD/JPY not yet over" Woo and Bikbov added.