ECB Will Cut QE In Half, But You And Draghi Can Still Netflix And Chill For 9 Months

Yes, “very gradually.” Or preferably “not at all.” But like the Fed, they’re going take some baby steps and see how things go. 

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One Trader Calls It: This Is The Day When It All Changes

“I’m talking about good old fashioned two-way flow and nascent trends galore.”

‘The Biggest ETF In Town’

“And with CSPP holdings at €116bn and growing, a big ETF at that!”

Bubbles, Bubbles, Everywhere…

“Bubbles, bubbles, every where, Nor any one to pop.”

Still One Of My Favorite Trades

“This might seem trite, but the scariest thing in today’s market is currency strength. No one wants it. No one can afford it.”

‘Keep One Eye On Left Field’: Here Are The Most Important Q4 Market Themes

“As always, keep one eye on left field for the “unknown unknown” that could shift the market’s thinking.”

‘They Bought It All – Literally’

To be sure, traders and investors were left to cope with conflicting signals in the just-concluded trading week. For one thing, you never want to be completely out of risk assets in an environment where the central bank put is still in place. Underscoring that was Thursday’s ECB presser where Mario Draghi made a concerted…

‘The Clocks Stopped At 1:17’…

Ok, get ready.

For now, the fiscal-chaos-can has been kicked, Harvey is behind us, and North Korea’s latest nuclear test has come and gone.

But dead ahead is Irma’s landfall in Florida, North Korea’s “founding day” (which by most accounts will be “celebrated” with an ICBM launch), and of course, more gridlock in D.C. We are, figuratively and literally, in the eye of the storm on Friday.

Ok, So What Now?

Just one more day of this before the weekend, when we’ll all get to put up the plywood and hide in the basement as Irma turns Florida into Atlantis and Kim turns Tokyo into Dresden…

Euro Surges As Draghi Speaks, GDP Outlook Revised Up, Inflation Path Down

“At the same time, the recent volatility in the exchange rate represents a source of uncertainty which requires monitoring with regard to its possible implications for the medium-term outlook for price stability.”

‘Sorry, But It’s Crazy’ – Riksbank Decision And The Policymaker Paradox

“Krona has appreciated faster than in [our] July forecast and while it’s reasonable to expect krona to appreciate due to the strong economy, it’s important that it doesn’t strengthen too rapidly,” Ingves said at the press conference, before stating the obvious as follows: “There are risks if Riksbank makes policy less expansionary before other, larger central banks.”

ECB Leaves Everything Unchanged – Eyes Turn To Draghi

But you’ve got to think Mario Draghi isn’t looking forward to Thursday’s presser.

Although no one expected any actual change to policy rates or the APP, markets are expecting quite a lot in terms of outright jawboning, telepathy, side-eyes, winks, nods, or really anything at all to suggest that the ECB is going to try and keep a lid on euro strength and/or is prepping an exit plan from stimulus.

ECB Said To Study QE ‘Scenarios’ For 2018 – Decision Not Expected Before October

Now you can assume that “adjusting” means winding down, but then again, it could also mean changing the parameters to get around capital key constraints in the event they find themselves breaching technical limits. 

Death By A Thousand Cuts.

The bottom line is that between another powerful hurricane approaching the U.S. mainland, U.S. markets catching up with their global counterparts in terms of pricing in North Korea after the long weekend, the DACA decision which portends more bickering in Washington, and the looming debt ceiling debate (with the specter of a technical default showing up in today’s decidedly poor 4-week bill auction), it was death by a thousand cuts.

Draghi’s Worst Nightmare

“Trading has never been a straight line. Even for bitcoin, the cryptocurrency with an ever-impressive performance this year, the ups and downs in the short-term have surely created havoc for investors on a mark-to-market basis.”