ECB Bond Buying Program: To Be Announced Shortly…http://www.currencynewstrading.com/wp-content/uploads/slideshow-gallery/ecbbondbuyingprogram.jpg
September 4, It is becoming increasingly clear that ECB is preparing for some major announcement come this week’s ECB Press Conference; the sheer number of rumours and comments from ECB, government officials, and financial press are all pointing to some kind of action from the ECB, although Draghi has been clear that ECB will refrain from bond buying before the September 12th German Court ruling, but there are no rules against laying the groundwork on how ECB is going to proceed with the bond buying program, and honestly, it would be a much welcomed move to say the least.
Central Banks Joint Action Probability Heats Uphttp://www.currencynewstrading.com/wp-content/uploads/slideshow-gallery/Central-Banks-Joint-Action.jpg
September 5, With major speculations flying wild in the market today on the potential of a bond buying program announcement tomorrow during the ECB Interest Rate Press Conference, market is now speculating a potential central banks joint action tomorrow involving the PBoC, the BOJ, the ECB, and of course the BOE. The Feds are probably going to chime in as well if other central banks participate in this event, along with SNB and BOC, although the probability for this to take place is not high, one cannot rule it out.
US Nonfarm Payroll Employment (NFP) To Beat Expectation In Augusthttp://www.currencynewstrading.com/wp-content/uploads/slideshow-gallery/nfp-obama.jpg
September 6, It does not take an economic analyst to see that everything is pointing to a better than expected release on Friday, especially considering the direct-correlated ADP report, which came out at 201K. I believe for the very least, we will get an inline release (as expected at 140K), but chances are we should get above 160k to 200K tomorrow. Market should be pricing this release ahead of schedule, which means we may see continued weakness in the JPY...
Outright Monetary Transactions (OMT): ECB’s New Tool Against Crisis…http://www.currencynewstrading.com/wp-content/uploads/slideshow-gallery/OMT.jpg
September 6, Draghi has decided to launch a new bond purchase program called the Outright Monetary Transactions (OMT) and ended the previous program (SMP) of the same purpose today. This move was highly anticipated and market reacted expectantly, following the time honored tradition of “buy on rumor, sell on news” maneuver as EURUSD breached the 1.2560 from the high of 1.2640 minutes after Draghi ended his press conference… The biggest selling point for the Germans on this bond purchase was the conditionality...
Nonfarm Payroll Is Not Too Cold, Not Too Hot, And Not Just Right Either…http://www.currencynewstrading.com/wp-content/uploads/slideshow-gallery/Bernanke-NFP.jpg
September 7, Today’s Nonfarm Payroll (NFP) release came in just shy of 100K, or below the critical “line-of-sand” level that was rumored to be the determining factor for further stimulus by the Fed. Of course, 96K is darn close to 100K and when you look at the figures year to date for 2012, average jobs created monthly is at 136K; but when you look at just the last 6 months, you’ll realize that the economy barely met the expectation of 100K, at an average of 104K of new jobs created 6 months ending in August. A closer look at today’s number reveals some alarming facts...
Upcoming: German Constitutional Court Ruling On ESMhttp://www.currencynewstrading.com/wp-content/uploads/slideshow-gallery/the-euro-bunch.jpg
September 10, It seems that it is not yet a done deal for the German Constitutional Court Ruling on the ESM to go well for the Euro, at least not for the analysts at Morgan Stanley… with that said, the majority of the market is expecting a positive ruling, one that will keep Germany in the ESM, and the alternative will devastating to say the least. I think it is safe to say that the market is not even contemplating on that possibility, let alone pricing in ahead of the event… If the verdict comes out unfavorable, or “no”, I believe EURUSD could drop to the 1.2500 levels...
What Will Bernanke Do Next – To QE3 Not To QE3?http://www.currencynewstrading.com/wp-content/uploads/slideshow-gallery/Qe-or-no-QE.jpg
September 12, Bernanke is at a crossroad of sorts, at least that’s what a poll conducted by CNNMoney shows, that out of 13,000 respondents, over 52% don’t think QE3 is coming… Other analysts, such as PIMCO’s El-Erian and Gross, both stated that Fed is likely to extend the forward guidance to 2015 instead of an all-out QE3, with Gross being a bit more optimistic and points to a potential “strong hint” of QE3 program in the future.
September FOMC Statement Analysis And Forecasthttp://www.currencynewstrading.com/wp-content/uploads/slideshow-gallery/FOMC-meeting-infinity.jpg
September 13, All in all in this FOMC Statement, I’ll have to say that it is negative for the US Dollar, especially considering the last paragraph (not counting the vote counts) where the committee expects current easing policy to remain in effect even after the economy starts to strengthen, basically telling everyone in no uncertain terms that the Fed is willing to tolerate higher inflation in exchange for stronger economic recovery… this is in my opinion, the most important point and the primary focus of the entire statement.
Fed QE3 To Increase To $85B By Year End – Chicago Fed Evanshttp://www.currencynewstrading.com/wp-content/uploads/slideshow-gallery/fed-QE3-increase.jpg
September 18, Federal Reserve Bank Of Chicago President Charles Evans delivered a speech today titled “Perspectives on Current Economic Issues” at the Bank of Ann Arbor in MI, in which he expressed his support on recent Fed QE3 announcement. Evans is a long-time dove, who consistently called for a target based monetary policy, and it is no surprise that he supports QE3. In the Q&A sessions that followed the speech, Evans talked about that he sees the Federal Reserve increases the size of MBS purchases per month to $85 billion by year end after Operation Twists end...
Bank Of Japan’s Response To QE3 – ¥10T In Asset Purchases…http://www.currencynewstrading.com/wp-content/uploads/slideshow-gallery/boj-response-to-QE3.jpg
September 19, Bank of Japan has responded to the recent stimulus launched by the Feds dubbed “QE3″, with more stimulus of their own in a new attempt to depreciate the yen as JPY’s rapid rise puts Japanese economy on watch for further stagnation. This announcement came as a total surprise even to Japan’s own Finance Minister Azumi, as most analysts expected BOJ to act behind the curve as usual. Of course, this is likely to add more pressure on the JPY as both stimulus and threats of intervention limit its upside potential.
Is EURUSD Consolidation Temporary?http://www.currencynewstrading.com/wp-content/uploads/slideshow-gallery/EURUSD-Consolidation.jpg
September 21, Recent EURUSD consolidation is obviously due to the correction of the gains from Fed’s surprise QE3 announcement last week and the launch of OMT by the ECB the week before. Of course, today’s report out of SNB on their diversification into AUD also provided some clarity as to how EURUSD dropped to the low-end of 1.2900 against on such a short notice, but it is important to note that the overall trend for further bullish breakout remains unchanged, in my opinion…
Greece And Spain Uncertainties Weigh On The Euro…http://www.currencynewstrading.com/wp-content/uploads/slideshow-gallery/samaras-rajoy.jpg
September 25, Spain is obviously attempting to leverage the ‘OMT’ effect once again by asking ECB to commit to a bond purchase figure. Of course, this in itself is brilliant because any response from ECB will be positive for Spain, thus giving Spain more time before doing the inevitable... As far as Greece is concerned, today’s news on Meimarakis resignation definitely has some effects on the market, adding to the general uncertainty over the future of Greece. As Greece is desperately trying to convince Troika that it has turned a new page...
Spanish Budget Paves The Way For Future Bailout…http://www.currencynewstrading.com/wp-content/uploads/slideshow-gallery/spanish-budget-issue.jpg
September 28, Spanish budget for 2013 included deep spending cuts but it may not be realistic as many analysts have pointed out. The budget is based on a low and sustainable Spanish bond yield, which is only likely under ECB’s OMT program, thus leads us to the conclusion that Spain is preparing for bailout and moving ahead of schedule… As I have pointed out in my previous articles, Spain is likely to meet all conditions of bailout before requesting for bailout...
Month In Motion – September 2012
October 1, 2012 by Leave a Comment