EurAnalysis

I am looking for a spike to 1.3 in like 10 seconds and then TIME TO DIE!

No spike for you!

With a PPI (Producer Price Index) increase of +1.7%, I find it hard to believe that the Fed will go ahead with asset purchases in the face of such a high PPI which is a pre cursor to a high CPI (Consumer Price Index), the measuring stick of inflation. CPI is due out tomorrow.

Still inflation is under control below FED target but yeap that 1.7% is not that good for QE supporters...

"Angry bears" ... ... be careful that the last time the FED decided to "go for it" during Reagan, it is already more than 25 years and the dollar has never look back up... GL ... let see how it goes today...

sisse

LOL.. probably not but it is crazy like that at times.

I dont usually take snippets and post them here, but found this one to be quite interesting, decide for yourselves, and if ive engaged in any wrong doing, PT please let me know and i delete immediately:

SNIPPET:
This week had three event risks: The German Constitutional Court ruling, the Dutch election and now today the FOMC meeting. Two down, one to go....and this one could be "the surprise".

The market is expecting no major change from the Federal Reserve - at most a change to the outlook to extend the expectations for low rates out to include 2015 from the current horizon of late 2014, but...I think we may be in for a surprise. The minutes, the 'leaks', the tone and the focus inside the FOMC have changed for two reasons:

1. The dual mandate has become a single mandate: jobs, jobs and jobs. Bernanke is frustrated that his monetary experiments have gotten him practically nowhere in terms of changing the dynamics of the US job market. The US economy has stabilised but not found a new growth path. The Fed wrongly continues to believe that unemployment is cyclical, we have long argued that it's structural (wrong skills, wrong locations, poor average education).

2. The fiscal cliff: If nothing is done, the price tag on the fiscal cliff is 3-4 percent of negative GDP due to the automatic budget cuts and overall austerity. This would be good for the fiscal deficits, but as we saw with the Club Med in Europe, the cuts would take US growth to the brink of - even into - a full-blown recession. The political negotiations will quite possibly reduce the height of the fiscal cliff, but considering the shenanigans of last year's debate, there is a real risk that this will end in a compromise in which GDP is still impacted by 0.5-1.0 percent of GDP. (Which is about minus 100 points in the S&P.)

In short, more Fed easing is more likely as the Fed thinks it must soften the blow to unemployment and growth from the fiscal cliff.

As for what the Fed will do, we may see unsterilised asset purchases, an extension of the exceptionally low rates language to 2015, and maybe even more explicit policy targets. In other words, this could be the full blown QE3.

The market looks at history and thinks that the Fed won't ease here because the stock market is not down and the US economy is humming along nicely. I certainly believe that the Fed should hold off on further easing, as my number one premise for creating positive growth is to 'do nothing' for years and let the micro-economy adjust and take over from the macro policy mistakes. But Bernanke and his friends around the world are Keynesians, they have an unshakable academic and dogmatic belief in their own abilities to save the world, and most importantly they don't want to be blamed for not doing enough - with Bernanke's term running out at the end of next year and with a known and long lag before policy takes effect, Bernanke could also be thinking in terms of both his legacy and/or his reappointment.

Policy makers and central bankers are once again throwing their shoulders to the sisyphean task of Keynesian extending and pretending in a balance sheet recession. This week, China announced USD 100 billion worth of fiscal stimulus, Europe agreed to yet another rescue 'mechanism' and the US will print more money. What is this - 2008 again? Let us not forget Einstein's immortal words: "insanity is doing the same thing over and over and expecting different results."

The market reaction to this will be higher gold (test of 1800?), a weaker US Dollar (EURUSD of 1.3150?) and a test of stock market highs (1450/60?).

I do, however, still think this is the fifth and final wave of the cycle, meaning I will fade any major moves sooner rather than later - monetary policy's ability to change the macro-economy stopped two years ago. This week we may see the end of its ability to take stock and risky assets higher. There is only one cheap asset left in the world: money, and that's a warning signal worth listening to.

Wow... the Author is a bit out in left field with this statement


I don't know about you, but the market is clearly expecting a lot more than an extension of forward guidance. Why else would the USD taken such a beating and why else would Gold have rallied so much already? I say easing is already about 80-90 percent priced in. The "surprise" will be "No easing"

Everything else in the article is great and I agree with it.

2891 - yesterdays NY close, if it opens today lower - going to test 282x..?

Wake me up when it tests 1.2440

naah.. it would be too obvious..

Check your PM

Lol Jamie. I just love this guy.

-20%

T

POLL

1) Come US close what 50 pip range do you believe the market will be at.

2) What direction do you believe it will be going until tomorrow afternoon.


1) 1.2800 -1.2750

2) down

I will

Hey, you took my answer

Okay I'll pick something else...
1) 1.2799 - 1.2749
2) Down

HAHAHAHAHA great minds think alike.

Hopefully that statement doesn't turn into "idiots think alike"

Steve Leiseman is on CNBC saying he's convinced the Fed is going ahead with $500 Billion of QE TODAY.
I think the guy is totally off, but he may be bang on and it is in fact the FOMC that are the idiots.

I still expect a spike up but it is coming down at some point. What ever high it hits.... SELL. I know I am. I re"thunk" my plan and I put sell orders in at 50 75 and 95 of about 1/2 my normal lot. If anything it will drop like a rock just so it can come if later worst case IMO.

hehe.... THIS is very true.

Price is already hoovering in exhausted zone.