To be sure, this looks like it will hit the euro in early trading. The single currency will likely knee-jerk lower against both the yen and the franc and you can expect to see a flight-to-safety bid in fixed income.
You’d probably be wise to do the same.
Now stay tuned to find out if Kim bought some VXX today on the cheap so he can fire off an ICBM this evening and make a few million to put towards his next H-bomb.
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.
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.
“Well, that’s nothing to be proud of, Rusty…. 50 yaaaards.”
“Therefore, I wouldn’t over-interpret or dramatize.”
Right, so the storm wasn’t supposed to come until next month.
For years, DM central banks have been forced to kind of suspend disbelief with regard to inflation and other incoming econ data in order to persist in the fantasy that printing trillions in fiat scrip was good for something other than inflating bubbles in financial assets. I’m sure it wasn’t lost on them (well, it…
“The exchange rate has become a bigger issue,” one of the sources told Reuters. “It is now less favorable for an exit and a stronger argument for a muddle-through option.”
When jawboning just ain’t gonna cut it.
Although I can’t imagine why…
Ok, so the overarching narrative for this week shouldn’t be materially different from last week – people will be concerned about the same things, namely the looming debt ceiling debate, the odds of a government shutdown which ebb and flow with whatever shows up on Trump’s Twitter feed, and the fallout from North Korea’s latest…
There’s a lot of commentary floating around out there this morning about the euro ahead of Jackson Hole. The single currency’s relentless rise heading into August was starting to weigh on eurozone equities and needless to say, excessive FX strength isn’t something that’s welcomed with open arms by central banks that are still engaged in…
“Ideological interpretation: Looking down is a mistake — the system works only if no one opens his eyes.”