It's obviously a big week for financial markets still smarting from the sting of the SNB. The apparent raison d'etre for the Swiss volte-face is coming to town on Thursday, in the form of a much-anticipated ECB QE announcement.
That it is much anticipated, of course, raises the ante on having a view; given the ongoing strength in European rates and weakness in the euro, it would appear that there's a lot baked into this particular cake. Of course, Mario Draghi has shown an almost Svengali-like ability to bend markets to his will; he's certainly had more success convincing punters to sell euros and buy BTPS than he has convincing the Germans of...well...anything.
In any event, Macro Man can see arguments in favour of following Draghi's lead once again, and others in favour of "selling the fact." Certainly last week should give punters pause about slavishly following the apparent dictates of any central bank. He thought it would be useful and informative to conduct a brief survey about expectations for ECB policy and market reactions. Insofar as the audience in this space is well-informed about these issues, the results should provide an interesting snapshot of what "smart money" expects. Readers can of course then follow through with their own interpretation of these results.
Kindly fill in the form below: a results posting will follow before the ECB renders its decision.
European QE will do nothing.. mind your timeframe if you are long EU equities
ReplyDeleteGreat Survey! Thank you very much for this
ReplyDeleteSeems to be a box with no accompanying question.
ReplyDeleteAnyway, here's my prediction for Thursday: https://vine.co/v/OMI0EgTqdd6
Can't we just wait for 24 hrs to hear the actual plan from the word-smith himself? I love all the seesaw action related to this WSJ story.
ReplyDeleteI did my survey after the leak to WSJ, LOL....
ReplyDeleteECB's leaks it to "sources", waits to see the reaction so they have an opportunity to "revise" it tomorrow if need be
ReplyDeleteECB, BOC .. who's next ? Yellen now kicking the US rate hike timetable into the long grass.
ReplyDeleteYou guys are too smart for your own good. Of course I wanted to "Hilsenrath it" first to see if it bombed, and then I can tweak it overnight, hopefully catching a few hapless punters out of position before they get the bazooka up the ... [redacted by Bundesbank]
ReplyDeleteLOL, Manish. April 1, 2020 for my US rate hike.
ReplyDeleteI think Fed's Jan 28 FOMC will be "in line" it will build on false hope of rate rise in H2, then EUR/USD will slip and perhaps go to 1.12/1.10. However at March FOMC, Yellen cannot keep it "in line" and she will come out with the truth ( in her woody allen like voice) - I didn't mean H2 2015, I meant.... blah. No hike my dear EUR shorts she will confirm. EUR/USD will rip up. There is a trade to accumulate long EUR/USD from 1.12 onwards
ReplyDeleteWhatever they say Jan 28, the jobs number on Feb 6 is going to be a stinker (we guess sub 100k) and that's game over for USD longs and the Impossible Trinity trade is toast, as is the 2015 hike. Dame Janet will admit as much some time in the Spring as EURUSD rips skyward.
ReplyDeleteMedia can say whatever they want about Europe being in a deflationary spiral blah blah blah US flexible labor markets blah blah blah energy self sufficiency blah blah blah free community college blah blah blah but when capital finally wants to rotate, it is going to exit the US quite quickly. The prospect for 2015 for the US is actually going to be a delicious bout of mini-stagflation, as the economy remains mired and unemployment ticks up somewhat even as commodity prices pick up on DX weakness. Enjoy!
LB,
ReplyDeleteI do not think that NFP would go down that much for 01/2015. Sub 200k is likely and should sink USD for a while.
But given ECB and Greek election in the next few days, timing is more important than ever here.
And the movement in yields of jgb and bunds, is it another CHF like moment for some credit folks?
ReplyDeleteI have a complaint about the fed rate hike question - my ginzu 2000 model solved for 2068 and the dropdown stops at 2065.
ReplyDeleteAh well what is one less respondent - not like this is a statistically sound sample - Diogenes could open a book club with this lot.
Oh and left - capital isn't going to flow 'OUT' of the dollar and 'IN' to Emerging markets - it is going under the mattress and staying there. See, there is the ninja trading (what are they gonna do next) and then there is cockroach trading (run....)
$50B a month I think is a good number. Euro feeling like it might rally on that.
ReplyDeleteNico, I have to disagree, shorter term price action just feels strong in EuroStoxx, Dax etc
Thanks Poloz for that smack on my $CAD. It seems like 1.30 is in the cards.
Oil at $120 was transitory. It was transitory on the way down until it went past OPEC's number.
ReplyDeleteSo what do we need it at to stoke inflation and have QE working? $300?
I am a robot.
Ironic!
ReplyDeleteDW t.v. interviews a Greek family:
https://www.youtube.com/watch?v=8w0HvYd6LCc
Well..that was a fun day here in Canada. Bank of Canada decided to get involved with a bit of shock and awe of its own with a cheeky little cut. Oil price shock and all that. Caught the entire street off guard and there was blood everywhere. I guess when you hold your policy rate at 1% for 5 years and talk about risks to financial stability due to "household imbalances" (read: 162% household debt/income ratio), you lull a lot of people into thinking that the bank will never cut rates and that they can only rise. oh yes it feels like we're going to have to get very used to vol again this year.
ReplyDeleteNext up, Draghi - how can he surprise us?