Wednesday bullet points

* The Fed statement was perhaps slightly softer than Macro Man was expecting, though Lacker's continued dissent prevented it from being too dovish. Nevertheless, thee was nothing in it to seriously threaten bonds ors equities. The strip continues to look like the best place to 'trade the Fed.'

*Macro Man was shcoked, SHOCKED that weak domestic demand and lower oil in October led to a substantial improvement in the trade deficit. For those keeping score at home, the deficit on both a headline and ex-oil basis was the best in more than a year. Maybe the weaker dollar is finally having an impact! In any case, it would be slightly ironic if, in a quarter in which the dollar has sold off for 'strutural reasons', next exports were to be the largest positive contributor to GDP.

*The DAX/SPX trade has gone horribly, horribly wrong. After trading down to 4.47 on a cash basis 2 weeks ago, the ratio has surged back towards its highs at 4.61. A close at or above 4.62 or a DAX close above 6500 will probably require somne position adjustment to stop the bleeding.

*The death of FX carry has been greatly exaggerated. The antipodean currencies are trading very well indeed, while JPY and CHF have been smoked on a cross basis today. As such, it is time to jettison Taiwan. Macro Man will do so overnight.

*In fixed income land, JGBS are entereing interesting territory, having rallied sharply over the last few days. If cash yields dip again tonight, Macro Man will be tempted to sell some, despite his general pessemism on the Japanese economy. JGBs have been range-y for much of the year, and Macro Man isn't sure we've seen enough to break. In the UK meanwhile, the market is pricing in at least another rate hike from the BOE. While yesterday's inflation data may well have shaken Mervyn King and co., Macro Man believes taking base rates to 5.5% would be foolhardy and swiftly reversed. If the short sterling strip sells off much more, there will be the possibility of an interesting spread trade with the US.

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