I want to start off by making a suggestion for the calender when posting results. Take the core PPI for example; the result is listed in green, indicating the number was better then expected. Being that PPI is an inflation number and that it came out higher, I think they should list it in red as this number being higher is actually a worse result. I do want to say thanks to whomever runs this whole thing though-FF is a great place to share ideas and I'm sure it takes quite a bit of effort to run it.
I have alot of questions about some of the results we've seen this week and the overall tone (negative) of the $. The bulls have run out of gas and I'm not sure why. To my thinking, there were a lot of $+ (inflationary) indicators.
The week started out with the Empire Index 2x as good as expected. The core PPI was 3x higher then consensus. The TIC report showed a vast amount of foreign capitol being invested in US gov't paper ($+ in the short term, foreigners have to buy $'s to buy the bonds). New jobless claims were down. Most curious to me was the reaction to the market off the core CPI; while the number was on consensus, it shows that number as being higher then the Fed has stated it wants it to be and the y/y rate is the highest for several years. Then off of last weeks higher NAHB reading (a shocker even though it's still way below 50), we had the gov't saying that housing starts increased. Bernanke has stated plainly that the Fed is depending on a continued slowing in the construction of new houses to slow the economy...the only real $- reports were leading indicators and the Philly Fed.
On the other hand, the market is convinced there will be no US hike next week and this is why we saw gains in the GBP, EUR, AUD and NZD. In GBP,NZD, and AUD especially, we have markets where traders are convinced rates will go up at their next meetings. So what's happening in the immediate short term is traders getting into those currencies.
The big thing next week will be the tone of the Fed statement following the rate announcement. The market will be focusing on this intensely. For the life of me I can't see how it will be anything but hawkish. Personally i'm preparing to see a 180 in the markets perception about what the Fed is going to be doing next time. Don't forget about the NFP and the upward revisions. There are a lot of jobs in the economy.
I took a longer term mini postion in the GBP/USD (long) based on the markets perception of no raise for the FED and a raise from the BoE. I'm gonna watch this carefully because perception can change quickly. If i'm lucky enough that $- sentiment remains until the FOMC, I'm definately gonna be out of it prior to the release.
How do you see the statement? To my thinking, it can't be anything but quite hawkish. Your opinion?
I have alot of questions about some of the results we've seen this week and the overall tone (negative) of the $. The bulls have run out of gas and I'm not sure why. To my thinking, there were a lot of $+ (inflationary) indicators.
The week started out with the Empire Index 2x as good as expected. The core PPI was 3x higher then consensus. The TIC report showed a vast amount of foreign capitol being invested in US gov't paper ($+ in the short term, foreigners have to buy $'s to buy the bonds). New jobless claims were down. Most curious to me was the reaction to the market off the core CPI; while the number was on consensus, it shows that number as being higher then the Fed has stated it wants it to be and the y/y rate is the highest for several years. Then off of last weeks higher NAHB reading (a shocker even though it's still way below 50), we had the gov't saying that housing starts increased. Bernanke has stated plainly that the Fed is depending on a continued slowing in the construction of new houses to slow the economy...the only real $- reports were leading indicators and the Philly Fed.
On the other hand, the market is convinced there will be no US hike next week and this is why we saw gains in the GBP, EUR, AUD and NZD. In GBP,NZD, and AUD especially, we have markets where traders are convinced rates will go up at their next meetings. So what's happening in the immediate short term is traders getting into those currencies.
The big thing next week will be the tone of the Fed statement following the rate announcement. The market will be focusing on this intensely. For the life of me I can't see how it will be anything but hawkish. Personally i'm preparing to see a 180 in the markets perception about what the Fed is going to be doing next time. Don't forget about the NFP and the upward revisions. There are a lot of jobs in the economy.
I took a longer term mini postion in the GBP/USD (long) based on the markets perception of no raise for the FED and a raise from the BoE. I'm gonna watch this carefully because perception can change quickly. If i'm lucky enough that $- sentiment remains until the FOMC, I'm definately gonna be out of it prior to the release.
How do you see the statement? To my thinking, it can't be anything but quite hawkish. Your opinion?