GOLDMAN SACHS - How USD longs Come Unstuck & What About EUR Longs?

The surprise decision by the FOMC not to taper asset purchases has unsettled market with many market participants who were previously proponents of the US growth story have had their confidence shaken, almost as if the FOMC knows something that we don’t. In this regard, Goldman Sachs points to a very particular aspect to the recent Fed surprise which show large an impact there has been to FX positioning. "Overall USD long positioning...

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FX Macro And Sentiment Analysis - Week 39 - 2013

Downloa...

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BNP Paribas: Stay Short EUR/USD Against 1.3730 & Sell Cable Against 1.6310

BNP Paribas maintains a short EUR/USD position from 1.3510, targeting 1.28 with a stop at 1.3730.  "The overall level of activity in the eurozone is very weak, something that ECB speakers (including board member Constancio on Thursday) have been very keen to emphasize. We continue to see risks skewed towards further policy easing from the ECB, in contrast to the exit-focused Fed, and we remain short EURUSD as a trade recommendation,"...

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GOLDMAN SACHS: Betting On A Weaker Dollar

The Fed surprise last week caused growing uncertainty among FX investors and removed one potential catalyst for Dollar strength that the FX consensus had been looking for, says Goldman Sachs. "We now expect tapering to start in December with $10bn. More importantly from an FX point of view, however, is the strengthened forward guidance. Forward 3-month rates on a 2-3 year horizon fell almost twice as much in the US as in many other major markets....

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MORGAN STANLEY: Here's How Much The Economy Will Suffer Every Week Of A Government Shutdown

Morgan Stanley's Vincent Reinhart and Ellen Zentner are out with a new report on the fiscal nonsense in DC. There are two really interesting nuggets. Frist are the odds of a shutdown, which they put at 25%: Our intuition is that the probability of a shutdown is relatively low but not negligible, say one-in-four. There is a powerful incentive for cooperation ahead of mid-term elections next year, as the public already holds the Congress...

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Stanley Druckenmiller - "The Greatest Moneymaking Machine In History"

Who is Stanley Druckenmiller?  Here is what hedge fund manager Scott Bessent says about Druckenmiller in the book “Inside the House of Money’   Stan may be the greatest moneymaking machine in history. He has Jim Roger’s analytical ability, George Soros’s trading ability, and the stomach of a riverboat gambler when it comes to placing his bets. His lack of volatility is unbelievable. I think he’s had something like five down quarters...

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The Pound Is On A Huge Tear

You have to be impressed by the British Pound. It wasn't that long ago that everyone was making "pound getting pounded" puns, and it was universally agreed upon that the UK economy was the sickest in the developed world. And like everywhere else it is pretty mediocre. But 2013 has been a huge turnaround year, in part due to the improving fortunes of all of Europe, and also over increased optimism with respect to monetary policy. Today the Bank...

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Bridgewater Goes Long Treasurys

For a long time, Ray Dalio's Bridgewater, the largest hedge fund (excluding the Fed of course) was a firm believer that thanks to the "beautiful deleveraging" thesis or namely a world in which nominal GDP growth is above nominal interest rates, driven lower primarily and some would say exclusively by the backstop of Fed purchases with the result being a decline in debt relative to GDP, there could be a way out of the Keynesian liquidity...

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BofA: Here Are 5 Reasons Why You Should Be Buying Treasuries

BofA Merrill Lynch is advising clients to buy Treasury securities. "We recommend a tactical long on the [5-year] note to position for a [10 to 15 basis point] decline in rates over the coming weeks," write BofA interest rate strategists Priya Misra and Shyam Rajan and technical strategist MacNeil Curry in a note to clients. "A combination of headline risks around the continuing resolution, dovish Fed speak, a possible Yellen nomination compounded...

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FX Macro And Sentiment Analysis - Week 38 - 2013

Forecast for US Dollar: Neutral The US Dollar plummeted against the Euro and other major FX counterparts as the US Federal Reserve disappointed those looking for it to “Taper” its Quantitative Easing policies, but is it enough to drive the Greenback to further lows?  Traders reacted to the “NO TAPER” headline in straightforward fashion: selling US Dollars, buying stocks, and buying bonds. All of these markets had done the exact...

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CITI: How Next Week's Events/Data Will Impact FX Markets?

Next week's price action in EUR could be influenced by the outcome of the German federal elections held on September 22...As we argued in our German elections preview we expect a grand coalition to be seen as more favorable for EUR as it could imply that Germany may become more open to ideas to resolve the Eurozone debt crisis on more sustainable basis like Eurobonds. At the same time, if the incumbent coalition government of CDU/CSU and FDP...

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DRUCKENMILLER: Fed Lost Chance For A 'Freebie' In Not Tapering

The Federal Reserve lost its chance for a "freebie" by deciding not to begin scaling back its $85-billion-a-month bond-buying program because the markets had already factored in the taper, hedge fund pro Stanley Druckenmiller told CNBC on Thursday. "We're going into extra innings. Maybe the punch bowl was running out and just about dry and two waiters are carrying this new punch in. We're really going to party now," the founder of hedge fund...

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