Out Of Office...

Dear followers, I am leaving for a long awaited 3 weeks holiday hence the blog and twitter feed will not get updated until I come back. First I apologize for the disagreement, second I wish everyone a good summer trading. It seems that markets are set for uncommon volatility for this period of the year following Bernanke and Fed adjustment in monetary policy discussions. So it should be good fun for traders! Regards, Retailpropsh...

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A Whole New Group Of People Is Going To Start Worrying About The Gold Crash

  Back in the day, a few years ago, when gold was soaring, anti-Fed types saw this as indication that Bernanke was blowing bubbles and creating hyperinflation.   Of course, the price of gold is just the price of gold, but it didn't stop people from making bold statements about how gold was "voting" against Fed policy so to speak. Well now gold is totally crashing. At the start of April it was near $1600/oz. This morning...

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CITI: 3 Reasons To Sell EUR/USD Targeting 1.2750: A New Macro Trade

EUR/USD could extend its latest drop in the very near term on the back of the following 3 reasons, says Citibank. 1- Euro banking sector risks seem to be on the rise yet again. The ratio between Eurozone and US bank stock indices has slumped close to its record low from July 2012. The last time the European bank stocks traded that low EUR/USD was close to 1.2000. These developments could be addressed at the upcoming EU summit on June 27-28....

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JOHN MCCARTHY: Sell Euro As Central Banks Diverge

There's room for the euro to slip against the dollar as the European and US central banks start to head down different paths. Earlier comments by European Central Bank and Bank of England officials highlight the different trajectories longer-term rates are likely to follow in the coming months as those central banks clearly state they are far from any consideration of reducing monetary accommodation. While the Fed has only outlined potential...

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Applying Metagame Concepts in the Markets

We have learned from the book "Order Flow Trading for Fun and Profit" that metagaming is a term used to define any method or strategy used in a game (read: the markets) that goes beyond a prescribed rule set and includes external factors to affect a game. In short, we have first to learn about the possibilities and limitations that exist in the marketplace (market microstructure), recognize who is participating in the markets and what their characteristics...

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BARCLAYS: Looking For Pause In EUR/USD Downtrend

As the rate approaches support near the 1.30 cloud base. Trading at 1.3130, the bank says the near-term range is likely to be between 1.3050 and 1.32, where it would look to sell rallies toward the range highs, for an eventual move that targets 1.2900....

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NOMURA: It Was An Epic Week, The Rules Have Changed, And There Will Be No Reversing The Fed's Big Bang

Here's how you know we had a huge week in the market: Research analysts start using blogger terminology in their notes. George Goncalves, the top interest rate strategy at Nomura, has a note out titled "The Fed's Big Bang Moment, Reversible?" and it starts like this: An epic week, to say the least, as markets re-priced to what some are calling the start of a new hawkish Fed world order. And it gets better: Unless one believes in time-travel,...

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After The Fed Shock, Markets Are Set For More Turmoil

Fasten your seatbelts. And expect lots of turbulence. If that was the message Ben Bernanke was trying to deliver when he said the Federal Reserve could soon start scaling back its massive stimulus program for the U.S. economy, it's safe to say investors received it loud and clear. In fact, the sell-off in stocks, bonds and commodities that rippled around the globe after Bernanke's remarks looks to some like the dawn of a new period of volatile,...

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DEUTSCHE BANK: Keep The Faith; Stay Core Short EUR/USD & Add On Bounces

The markets' reaction to the latest Fed words suggest that the dollar weakness against most G10 FX seen since late May was a position unwind, rather than a harbinger of things to come, says Deutsche Bank. "Indeed, the dollar has rallied against all G10 currencies since the FOMC meeting, and in most cases the size of the rally has been proportionate to the size of dollar weakness seen before. European currencies should therefore start to weaken...

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Fed Seen Tapering QE to $65 Billion at September Meeting

Federal Reserve Chairman Ben S. Bernanke will cut the Fed’s $85 billion in monthly bond purchases by $20 billion at the Sept. 17-18 policy meeting, according to 44 percent of economists in a Bloomberg survey. The survey of 54 economists followed Bernanke’s press conference yesterday, in which he mapped out a timetable for an end to one of the most aggressive easing strategies in Fed history. His remarks prompted economists to predict a faster...

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How The FOMC Statement Changed From Last Month?

Information received since the Federal Open Market Committee met in Marchy suggests that economic activity has been expanding at a moderate pace. Labor market conditions have shown somefurther improvement in recent months, on balance, but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has strengthened further, but fiscal policy is restraining economic growth. IPartly...

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NOMURA Hits The Nail On The Head On This Week FOMC

Nomura's Bob Janjuah hits the nail on the head in my opinion:"Here is what I think matters:1 – There can be no doubt in my view that the global growth, earnings, incomes and fundamental story remains very subdued. But at the same time financial markets, hooked on central bank ‘heroin’, have created an enormous and – in the long run – untenable gap between themselves and the real economy’s fundamentals. This gap is getting to dangerous levels,...

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