“This might seem trite, but the scariest thing in today’s market is currency strength. No one wants it. No one can afford it.”
Category: ECB
‘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
‘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.Â
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.”
‘Good Luck, We’re All Counting On You’: Full Week Ahead Preview
To be sure, whatever you thought was going to dominate the news flow in the week ahead is probably going to take a backseat to North Korea, for obvious reasons.Â
But North Korea isn’t the only thing on traders’ minds this week. Not by a long shot.
Holiday Road.
“Well, that’s nothing to be proud of, Rusty…. 50 yaaaards.”
Riders On The Storm.
Right, so the storm wasn’t supposed to come until next month.
This Hasn’t Happened Since 2014 (iTraxx Edition)…
Ok, it looks like some folks have seen enough.Â
Nobody Panic.
Your refund will be escaping this death trap with your life…
They Love To Talk, But Hate To Communicate
“Confidently dismissing the process as harmless for markets is a luxury they can’t indulge in.”
Bears Shouldn’t ‘Overstay Their Welcome’
“One of the most dangerous things in trading is to confuse what one thinks ‘should’ happen with the forecast of what ‘will’ happen.”
Don’t Dig Yourself A ‘Hole’: Full Week Ahead Preview
Ok, so strap in, because this promises to be an interesting week. August has proven
Cohn-Heads
But not like Beldar.
European Stocks React To ECB Minutes & Pondering The ‘Policy Maker Paradox’
Ok, so it’s worth taking a look at European equities now that we’ve got the ECB minutes and the attendant commentary about the dangers of a possible FX overshoot.
Euro Dips Further After ECB Flags FX Overshoot In Minutes
“The appreciation of the euro to date could be seen in part as reflecting changes in relative fundamentals in the euro area vis-a-vis the rest of the world†but “concerns were expressed about the risk of the exchange rate overshooting in the future.”
Borrowed Time.
Tick, tock.
5 Tail Risks That Could ‘Spoil The Party’ & Why One Bank ‘Stopped Worrying’
“We continue to stand by the message that a window of opportunity remains open”…
‘It’s A Sitting Duck’: Swiss Franc Plunge Continues, Bund Yields Soar, On Hot German Data
“All this makes the CHF a bit of a sitting duck”…
‘Sonata, Adagio & Minuet’: A ‘Symphony’ Of Debate Emerges Around Surging Euro
“Currencies, like symphonies progress through movements, not in straight lines. As a symphony progresses through the sonata, adagio and minuet, volume and intensity crescendos and decrescendos before the final forte surge of the rondo.”
Tuesday In Charts: ‘Remember To What You Owe Your Good Fortunes’
“We think the timing would be good for investors too to remember to what they owe their improvement in fortunes”…
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