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This makes no sense whatsoever?

  • #1
  • First Post: Sep 18, 2007 5:54am Sep 18, 2007 5:54am
Just a question

GBP today came out less than forcasted for CPI, which should mean sell, but everyone bought? why?

As well USA PPI came out less than forcasted, again meaning sell, but everyone bought? why

I m talking in terms of GPB/JPY and USD/JPY... thanks
  • #2
  • Sep 18, 2007 6:12am Sep 18, 2007 6:12am
CPI at 1.8%* Food prices here are going through the bloody roof: how convenient for a rate cut
*RPI is 4.1%
  • #3
  • Sep 18, 2007 8:59am Sep 18, 2007 8:59am
JPY may be really weak right now, the results that came out weren't that much off target (gbp anyways), and lastly, it's forex, weird things happen lol
  • #4
  • Sep 18, 2007 9:00am Sep 18, 2007 9:00am
Quoting xxfunguyxx
Just a question

GBP today came out less than forcasted for CPI, which should mean sell, but everyone bought? why?

As well USA PPI came out less than forcasted, again meaning sell, but everyone bought? why

I m talking in terms of GPB/JPY and USD/JPY... thanks
When the focus is on bonds, then reports that point to higher interest rates tend to push up ccy pairs. But right now the focus is on sub-prime (in both UK and US) and stocks (in the US) both of which might be helped by lower rates. Also Lehman's earnings report, which weren't as bad as feared, probably helped USD/JPY...
  • #5
  • Sep 18, 2007 9:16am Sep 18, 2007 9:16am
That's why I try to not get too much involved with the analysis of this or that news announcement: there's plenty of room for loose interpretation so it's everyone's guess at best.
  • #6
  • Sep 18, 2007 9:57am Sep 18, 2007 9:57am
Quoting HalifaxCB
When the focus is on bonds, then reports that point to higher interest rates tend to push up ccy pairs. But right now the focus is on sub-prime (in both UK and US) and stocks (in the US) both of which might be helped by lower rates. Also Lehman's earnings report, which weren't as bad as feared, probably helped USD/JPY...
Excellent comment HCB. Today we'll see if that theory plays out.
Virtue finds and chooses the mean. Aristotle, Ethica Nichomachea
  • #7
  • Sep 18, 2007 1:00pm Sep 18, 2007 1:00pm
Plutonite - perhaps it did; the only ccy that didn't surge against the USD on the Fed release was the Yen which funds the US stock market and loan debacles. Re. eur and gbp - I still believe there are lots of Northern Crocks out there, so that aside from the simple effects of interest rates the possibility of relief for sub-prime related investment banking problems in the UK and eurozone is perhaps a driving factor. Cad, well it's all oil, especially as petro-ccy countries are not going to be particularly pleased with a weakening $ against the euro.
But whether the helicopter relief actually works - or just provides a bit of wiggle room for the financial companies - remains to be seen. Behind every silver lining lurks a cloud
  • #8
  • Sep 18, 2007 1:11pm Sep 18, 2007 1:11pm
Quoting HalifaxCB
When the focus is on bonds, then reports that point to higher interest rates tend to push up ccy pairs. But right now the focus is on sub-prime (in both UK and US) and stocks (in the US) both of which might be helped by lower rates. Also Lehman's earnings report, which weren't as bad as feared, probably helped USD/JPY...
I think we saw this last time as well...I think when US GDP quater grew more than forcasted, instead of dollar going up, everything just went back to nomral...which meant carry trade conintued and USD decreased agaisnt other pairs like CAD and AUD...
  • #9
  • Sep 18, 2007 1:12pm Sep 18, 2007 1:12pm
Read the news especially Tim Clayton and NewstraderFX. Northern Rock is getting bailed out by BOE completely. That is huge news.
It really is that easy.
  • #10
  • Last Post: Sep 18, 2007 1:16pm Sep 18, 2007 1:16pm
Quoting THE FxORCE
Read the news especially Tim Clayton and NewstraderFX. Northern Rock is getting bailed out by BOE completely. That is huge news.
True, bust isn't Northern Crock primarily a retail bank? BoE, from what I understand, is backing up retail clients vis-a-vis normal deposits, but AFAIK the investment banks and hedge funds are on their own.
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