Tuesday, December 01, 2009
Macro Man was chagrined to find, upon emerging from his house this morning, that his windshield had iced over for the first time this autumn/winter. Fortunately, because his regular train is still AWOL, he's getting a later service, which afforded him the time to retrieve a scraper and do the business.
Little did he know, however, that the ice on his windshield had come straight from the veins of the marketplace. Dubai is yesterday's news, evidently....he's had no Nakheel price updates from FX monkeys at all this morning, and while the Dubai equity index has cratered again today, developed market stock futures are back threatening their highs of the year.
The dollar's also thoughtfully taking a beating, stirring the fire in the loins of the risk-orgy crowd. It now seems to be a popular proposition that the pain trade into year end is once again the melt-up; if positioning really is that sparse, Macro Man wonders, why did the market absolutely crap itself when the Dubai news hit the tape?
In any event, the lust for gold, both literal and metaphorical, is back in play today, and the barabarous relic has posted a fresh all time high this morning, tickling but not breaching the $1200/oz level.
Meanwhile, the FX carry crowd is once again swaggering about, perhaps at least partially because of policy divergence in the Asian time zone. The RBA hiked rates again overnight, in line with leaks yesterday but contrary to some speculation at the height of the Dubai panic. The BOJ, meanwhile, called an emergency meeting and announced a 3 month tender facility at 0.10%. Not exactly earth shattering, and hardly the thing to break the back of the deflationary spiral. But with 3 month TIBOR just under 0.30% and the yen near 14 year highs, it was enough to rally the strip and generate a small bounce in USD/JPY. How sustainable those are remain to be seen.
So here we sit, with ISM, the BOE/ECB announcements (will the last LTRO be fixed or indexed?), and payrolls yet to come this week....and Spoos are within spitting distance of their yearly highs. The last few months have seen a strong equity rally on the third or fourth trading day of the month; this time around, markts don't want to seem to wait.
Maybe they really do have ice in their veins.....or maybe they have ADD. Is a warm jumper or Ritalin the solution? We'll know more in a few days.