The USD/BRL volatility soared above nine to the dollar. This is surprising as the company has not actually cancelled its bond-trading platform, but rather chose to suspend operations until at least the end of this month. That doesn’t seem like a long enough time for the trade volume to cancel out the effects of the decision by Moro to leave.
It is impossible to say what has prompted Moro to make this announcement, although the short answer is probably no one really knows. Perhaps he had something to do with the latest (and perhaps final) round of layoffs announced by a lot of different companies including UBS. Moro’s decision to leave seems connected to this news, but there may be other events taking place at the same time as Moro’s decision.
At any rate, Moro announced his decision in an official company message. There is no written announcement that will change the dynamics of the trading pair. USD/JPY Volatility has reached such a level because the Japanese government is offering tax rebates on each yen held in JPY. (Not an unusual thing.)
The fiscal incentives are a factor in Moro’s decision. The US dollar is stronger than ever before and it is possible that Japanese investors are now seeing the value of their holdings changing and devaluing. In the last few days the yen has dropped below the dollar, but that is because of the early selloff in the stock market as well as the yen appreciation.
Moro had a long career at JP Morgan and we should all remember how “dirty” JP Morgan was. JP Morgan was caught manipulating foreign exchange rates. JP Morgan also made a lot of money from its massive mortgage investments.
In fact, JP Morgan was involved in the subprime mortgage crisis and JP Morgan CEO Jamie Dimon was forced to resign as a result of his company’s role in the crisis. JP Morgan later turned around and bought Bear Stearns.
Moro did not mention JP Morgan in his announcement, which would suggest that he is somewhat upset about the JPY tax rebate. Moro did not even mention the news in his announcement, which may suggest that he does not know about it or that he is not aware of it. There is a very thin line between being ignorant and being politically correct.
Moro may also have been put off by the popularity of the news story. JP Morgan was one of the top news stories of the day. JP Morgan is still very much in the news today.
There is a possibility that Moro has a huge portfolio that he has been forced to divest in the wake of his resignation. This could explain his silence on the subject, but that would imply that he may have confidence in the bank to continue in its current shape. It would not appear that Moro has confidence in the general market or his former employer.
If Moro had not resigned, JP Morgan could have offered him a severance package. Moro did not resign, so he can negotiate in any fashion he chooses. He may offer JP Morgan another huge sum of money to go away, but if he leaves JP Morgan he will almost certainly need to find a new job.
If Moro is reluctant to get a job and decide to move on, he is also likely to have quite a bit of social capital, especially among those JP Morgan employees who he knew very well. He would be able to exert his influence upon them through messages posted on the internet and through other methods. his past affiliations and friendships with employees from his old position at JP Morgan.