Some interesting currency moves today

[calugaruvaxile]

jr8, good point! eu starts smelling A LOT like the ussr. but the immigrant crisis will most probably be the breaking point

[JR8]

Weeee-eee-eee ....

[JR8]

It's going to severely penetrate up through 6200 tomorrow, oh yes! [this is uber tech/charting speak of course ], unless things change and it doesn't.

[tags: worthless self-interested opinion that will be regretted tomorrow, Unless I'm right, in which case I am of course a rare omniscient sage heheh...]

p.s can we have some handguns and tits now?

[JR8]

The day is here... perhaps the biggest day in economics/markets since the US last changed interest rates (is it 8 years?).

Collective opinion currently says they won't move. If they do then expect a shockwave. The Fed of course fully know this. And usually come such an event it has been *very* clearly pre-signalled. My 2c is we are not yet at such a stage.

[Nervous laugh]... we'll see.

[Wd40]

Asia did very well today, but Europe is bleeding. What happened?

[calugaruvaxile]

Asia did very well today, but Europe is bleeding. What happened?

the refugee crisis happened

[JR8]

Asia did very well today, but Europe is bleeding. What happened?

This is the best source I can think of to get the answer to that, today and any day.
http://www.ig.com/uk/market-news-and-analysis

If there are economic times I hate the most it is ones like this. The way I see it is like this...

- The markets often react in what initially appears a contrary way. They often rally on bad news, that's because they expect a big $olution to come along soon as a direct result.
- Good news can trigger a fall if it is not unequivocally and without question compellingly perceived as 110% good by everyone. That esp applies if the good news might trigger future bad news, like a scintillating economic performance raising fears of interest rates rising in the near future. So bad news is bad, somewhat better than expected new is bad, and much better than expected news is very bad.
- The Fed are making a lot of noise about rates rising. Some expected it this week, many others by year end. There is now (post FOMC) a lot of talk about it not happening until Q3 or 4 - '16! Talk about a mammoth disconnect.
-- re: above, so now we're going to risk-off and all eyes on the next FOMC, and the next, and... until they finally raise rates. I am of the opinion that markets will (superficially counter-intuitively) rally like nuts when the Fed does fiiiiinally raise rates. Despite that being bad news.
- The market *hates* mixed messages like this. Uncertainty is seen as large risk and is costed in (as we see with these falls). I am surprised there is not overt criticism of the way Yellen is handling this, it seems to lack nuanced finesse that the markets like to see. The subtle and unspoken ongoing guidance of expectations. A lot of people have no clue what she is thinking.... they hate that too. There is no problem yet, nor expected any time yet, but there's is a lot of 'doom' in what she says.
- Plus it's Friday, when a lot of trading risk gets unwound before the weekend. A lot can happen in a weekend and you can be stuffed and left stranded on the wrong side of the market, esp. if it is closed! Double-especially with hard to read people like her at the head of the Fed.

My my 2c of bare thoughts...

[JR8]

Following on from and tying into the above...
This short piece sums up the markets mood at the end of this week.
------
' Yellen paints the markets red
Heading into the close the FTSE 100 is 70 points lower, as markets continue to digest last night’s Federal Reserve meeting.
Friday 18 September 2015 19:14

Janet Yellen’s statement disappoints markets
Heavy selling into the end of the session
Focus now on PMI figures around the world and Greek elections

Markets can be a fickle thing. Going into last night’s Fed meeting, talk revolved around how damaging a rate hike would be to equity markets. It turns out that no hike can also be rather problematic, especially when accompanied by a sober statement and downgrades to economic forecasts.

As a result, stocks moved swiftly into the red this morning and have stayed there all day.'
------
That's the 1st half of the article... heres the link (no fee/sign-up/login etc) for the whole piece... http://www.ig.com/uk/market-update/2015 ... -red-27604

Now it's all eyes back on Greece....

[Wd40]

Whatever happened to all the hype around Mario Draghi's QE at the start of the year. Europeans markets are now at 1 year lows and France has been downgraded by Moodys.

[JR8]

The markets often forget all/any good news as soon as there is the slightest whiff of possible bad news. There was a big 'show' in the EU when QE started, that's all about getting the maximum PR effect from the QE programme. The Eurozone likely needs more QE, but the people who feel they are most paying for it, and really resent it, are the German electorate. They're sick of bailing out 'feckless Greece', to the extent the German opposition vote is rising in the opinion polls. Merkel better look out in case she and her party are thrown out of office. I can't say I blame the voters, no one in the EU voted for these kind of never-ending fiscal transfers. It reminds me somewhat of speculators attacking and breaking a currency peg (pegged FX rate). If she does what's needed, the direct result is she risks her own neck, her own 'political peg' would be broken with huge effect, maybe even the start of the end of Euro itself? Her and the EU's self-preservation will result in the Eurozone continuing to stagnate. What a complete mess!

In the UK, an influential member of the Bank of England interest rate panel is saying today that he reckons that UK rates, rather than rise (as currently forecast), actually need to drop, potentially to negative rates. IIRC that's never happened in the UK before, so this chap perceives the danger as far from over, grave, and worsening.

France downgraded. Hehehe. Couldn't happen to a more proud and up their own *"%& country (that's pitched at the politicians rather than the people). 'Sacre-bleu! How dare you (Americans (ie Moodys)) suggest our sovereign risk is not dressed in magnificent robes, and in fact is threadbare and half naked'.

--- Another story doing the rounds last week is that the Fed is holding off raising rates as the impact on emerging market countries with a lot of US$ denominated debt, will be to throw them into turmoil, i.e. their interest costs will rise rapidly. And that this would have a negative knock-on impact back on the US (and ripple out around the world reaching all of us).
I tried to Google on which EM countries would be most vulnerable to this. i.e. which have most debt/bond/treasuries denominated in US$. I couldn't find a table... maybe it's buried deep in some World Bank .pdf report or something. It'd be nice to know in which particular order those ducks are sitting.

I've never known a time in the markets like this before. Everything is so much more connected (EU, Euro, global trade, oil, and so on), that a considered and required action on one side of the world can end up whacking several countries on the other. The very mixed signals coming atop (the Fed) are inexplicable to me and sowing mayhem. I'm just counting my blessings, Friday could have been a BAAAD day for me. Well, it was bad, but could have been much worse... gawd only knows what next week will bring.

When the Fed fiiinally get their $h*t in gear with a coherent message and some action, if we're veeery lucky it might kick-off the mother of all global relief-rallies [well here's hoping hehe...].

[Wd40]

Its there in this PDF:
http://www.bis.org/publ/work483.pdf

China 1.1 Trillion
Brazil 300 Billion
India 125 Billion

http://www.telegraph.co.uk/finance/comm ... soars.html

[JR8]

Brilliant stuff WD, you make a better sleuth than me I'll read that later... interesting stuff. Sadly I have to hop shortly.

Just those headline numbers join some dots for me. Given the Chinese economy is already heading south, ramping up US$ interest rates would seem to risk a real double-whammy for them.
[- And then the dangerous shock-wave/rebound effect-> ] And if the Chinese economy is materially damaged, then what impact will that have on their import of US (and EU etc) goods?

I've never had time for anti-capitalists and anti-globalists (they usually seem simply to be anarchists who hate everything), but it looks like 'the West' might have really painted themselves into a corner on this one.

One conclusion I'm drawing (rightly or wrongly, who knows anything for sure these days?) is that despite all the alarming rhetoric from Yellon+Co, the Fed are going to have to raise rates veeeery slowly. And each baby-step in that direction is going to have to be achingly obviously pre-signalled to the markets. *Zero* room for surprises on that front. Each subsequent rise will have to wait until the global impact of the previous one has had full-time to play out. Just my hunch and 2c of course... we'll see! Let's just hope she gets it right, and the current rhetoric is intentional and for reasons too clever for me and some others to interpret. The first Fed hike this cycle is morphing into one of the more significant economic events of the century... maybe

[Wd40]

Europe again crashes today, while US did quite well yesterday and Asia was relative stable.

[JR8]

US futures right now point to the Dow opening about 200 points lower.

This of course will change before the opening bell. But right now it's not like the US is somehow immune to this...



Edit/add: '[21:08 SG time] 'US open: Dow plunges almost 200 points as Fed-driven volatility persists'.

[Wd40]

Yeah, but its looking ugly, EU indices are 3% down. All this because of uncertainty and no direct cause. Bizarre! and China which is supposed to be causing much of this, closed 0.7% up today.