Here's Why The Fed's Statement Is Roiling Markets

Stocks and bonds are selling off as the dollar strengthens in the wake of the release of the statement from the FOMC's October policy meeting. In other words, the market is interpreting the statement as "hawkish" — meaning the Federal Reserve now seems closer than previously to tapering its quantitative easing program. This was not what was expected by most on Wall Street. Many economists figured the FOMC would insert language...

Read More

This Is The Only NYSE Margin Debt Chart That Matters

Much has been made in the press about how NYSE margin debt is at an all-time high, suggesting that investors are excessively bullish. However, stock markets themselves are also at all-time highs — so perhaps the level of margin debt doesn't really tell us much that we don't already know. A post on the blog Philosophical Economics (flagged by Josh Brown) explains the mechanism whereby increases in the stock market translate to increases...

Read More

It Sounds Like The Euro Has Become One Of The Hottest Topics On Wall Street

All of a sudden, everybody is talking about the euro. The currency has risen 8% against the U.S. dollar since July 9, when selling induced by Federal Reserve chairman Ben Bernanke's June 19 press conference — in which he hinted at tapering quantitative easing, causing strength in the dollar — culminated. Today, the euro trades just below $1.38. Steven Englander, global head of G10 FX strategy at Citi, just returned from client meetings...

Read More

NORDEA: EUR On A Short Leash, GBP Struggles, & JPY Gets Boring

The following is the key outlook for the FX market this week as provided by Aurelija Augulyte, a senior FX analyst at Nordea Markets.  Where is EURUSD headed? What is fair value? The amount of fear and anxiety suggests the move above 1.40 will be painful for the complacent USD bulls. If you take the pre-crisis “normal” at face value, normalization will ultimately lead the EURUSD to above 1.40… Is ECB worried? - No, if you ask Germans. But...

Read More

It Will Be An Unusually Heavy Week For The Economy — Here's Your Complete Preview

Economists and traders will be very busy digesting tons of fresh information on the economy. "Next week’s data release calendar is heavier than usual because it contains reports that were postponed due to the government shutdown," said Credit Suisse's Jay Feldman. "October consumer and business surveys should be hit with government shutdown headwinds, but a gain in October vehicle sales should indicate consumer resilience. We look for...

Read More

RICHARD KOO: I Can't Find Anyone To Refute My Argument That America Is In A 'QE Trap'

The Federal Reserve shocked market participants in September with its decision to refrain from tapering quantitative easing, as many felt that the central bank had signaled the move at its June meeting. Fed chairman Ben Bernanke sparked a sharp rise in long-term interest rates at the June press conference by suggesting that tapering could happen later in the year. The September decision raised questions among observers over whether talking about...

Read More

Bonds Send A Worrisome Signal About Growth

NEW YORK (MarketWatch) — The sigh of relief felt in the U.S. bond market as Congress temporarily shelved its fiscal standoff is giving way to a more worrisome market signal: the economy isn’t as strong as we thought it would be by now. The Treasury market has been on a tear in recent days, beginning in earnest as Senate leaders announced a deal Wednesday to reopen the government through January and allow the Treasury to continue borrowing...

Read More