Wednesday, September 23, 2009

Well....

...that was as dovish as it feasibly could have been. Cue orgiastic rally in eurodollars, a nice pop in euro/dollar, and new yearly highs in the S&P. The boy who cried wolf indeed....

17 comments:

leftback said...

That EUR:USD 1.89 level is still intact overhead. CL is flat and DXY hasn't fallen to the center of the earth. Not buying this yet.

leftback said...

Euro in retreat, Macro Man. Sell the news?

Macro Man said...

Well, I think it has more to do with US corps wrapping up their hedge program before quarter end. Let's see what Voldy thinks tomorrow...

leftback said...

Sweet reversal, if one is of the "risk-off" philosophy - now let's see what tomorrow brings.

Nic said...

So they are leaving the punchbowl out a little longer but they aren't putting any more punch in ...

Crisis Management said...

"I am angry because the when it comes to the currency market the Chinese are like locusts- disgusting parasites who descend and raze everything in their wake." - Macro Man (vintage 2008)

Anonymous said...

[...likely to warrant exceptionally low levels of the federal funds rate for an extended period.]

if stocks, commodities cant rally on that and the dollar cant sell off, well...

Gregor Samsa said...

The ultimate question of life, the universe, and everything:

Why should the SPX and the USD be inversely correlated?

If your answer is 42, please try again.

My brain hurts.

Anonymous said...

uhhh ... mortgage buying program rate being reduced with immediate effect ... (tho spread longer) ie first micro sign of taking away the punch

leftback said...

Crowded, obvious and highly leveraged trades like DGDF are rewarding to those who ride them, and also amusing to those who bet against them as sentiment extremes are reached and they begin to unwind.

Gregor Samsa said...

anon 10:22 - it could be the first micro sign that the Fed (belatedly) becomes aware of the dangers the USD is facing.

Looking forward, something's gotta give.
The dollar can go down longer than the SPX can go up.

Nemo Incognito said...

Wasn't a disaster from where I am sitting - HSCEI down 2%, AUD down, JPY a pain in the a$$ as usual. Getting out here. Nice 2.5% slide in HSCEI but seems like we've seen our low for the day.

It is just me or is this a market for day traders?

Nemo Incognito said...

Oh, and yes, despite this little pullback over here its time to go DGDF again.

Insane? Unsustainable? Yes. Way to make money until December? Probably.

Anonymous said...

10:21
its bc there is no value!
only way "value" is synthetically created is through dollar fudging.

look- supplyside is back online- but demandside is not even close to being ready yet. w/ 10 yr at 3.50 inflation isnt a threat. so dollar will squeeze higher and mkt will sell off. its right in front of you.

mpm

Nemo Incognito said...

mpm, I assume the corollary of this is that now that AUD, JPY all creeping higher since asia AM that spoos should too.

Anonymous said...

changing tack slightly - can anyone else understand why GBP is getting another whack on the back of the "2 banks were hours from failure" story? It dates back Oct 2008. Like saying "sell your lehman stock". Horse. Stable door. Bolted. Lock...etc

MW said...

"Why should the SPX and the USD be inversely correlated?"

higher risk appetite => capital flows out of the US to seek higher returns elsewhere (just one of the ways we're turning japanese).

retail has bought more EM stocks in the first 9mo of this year than they sold in all of 2008. that's just one example.