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  • #912,701
  • Jul 27, 2014 9:38am Jul 27, 2014 9:38am
Quoting infinitus
{quote} http://cdn.intechopen.com/pdfs/32411...l_evidence.pdf very nice study, supports your view go straight to page 19 for the conclusion
it takes time to turn a tanker. i have posted this before blogging bandwagon hit town. it all has a multiple affect that will be unforeseen. suppose there is another M.E. west war. (sure like that will ever happen, a war in the M.E.? ridiculous ) last time most of the U.S alias sent a handful of troops after U.S. pressure (if your not with us, your against us). this with the u.s. not even a large consumer of M.E. oil. maybe the next time it will be the ones reliant on M.E. oil asking the U.S. to help. Europe and china may be on the same team in the future. and the u.s. may be the one sending some advisors or drones cheaply. and someone else will get the trillian + $ tab to weigh against gdp verse spending.
those who can, do. those who cant, talk about those who can
  • #912,702
  • Jul 27, 2014 9:43am Jul 27, 2014 9:43am
Quoting infinitus
{quote} maybe general problem with fundamental analysis: all can be explained in the aftermath - there are enough arguments which fits bias (both sides)
they are just looking at figures. they dont include the reasons for the figures.
drop in interest rates after 911
2 wars fought adding to deficit
increased oil production as the other 2 are changing.

this cant be seen till it has already happened looking at figures. it can happen quickly.
those who can, do. those who cant, talk about those who can
  • #912,703
  • Edited 11:07am Jul 27, 2014 10:00am | Edited 11:07am
Quoting parsifal23
{quote} Hi Fellow-Trader : nowhere did I say that I´ll take any new short positions NOW, BUT going long is IMO a very bad decision, like it was during the past 4 weeks too, I´m not interested to capture a few pips on a pullback (noone really knows when it will happen and how far it´ll go): It´s better to stay on the sidelines until the next leg lower will start. Most likely we´ll have sideways-movement for a couple of weeks, maybe only days, we´ll see. There are many other interesting opportunities to trade, why are so many traders focused only...
Yea I get you , it's just that I thought you were implying that its pure insanity to go long now.. haha

And I do agree about there are many more pairs than just EUR/USD, ones that gives a better Risk/Reward. I think everyone talks about EURUSD here because this is the EURUSD thread. Even if I am not trading it, I still talk about EURUSD here haha
Focus, Patience, Determination & Order in chaos
  • #912,704
  • Jul 27, 2014 10:17am Jul 27, 2014 10:17am
not a endorsement. i dont even know if whats said here is half true. its not advise from me in any way to believe this.
it is worth looking into if for curiosity's sake, not what this guy is selling. but for the point that easy oil is declining in the world. and that places with a small amounts of oil relatively to the M.E. may find it rewarding in the future, if M.E. is getting more expensive to retrieve. add to the social cost of these countries and some may have to get a job. with more producers and more cost, i bet the profit margins lesson for M.E. producers.
http://www.caseyresearch.com/cm/middle-east-oil-crisis
those who can, do. those who cant, talk about those who can
  • #912,705
  • Jul 27, 2014 11:02am Jul 27, 2014 11:02am
Quoting gatorinla
not a endorsement. i dont even know if whats said here is half true. its not advise from me in any way to believe this. it is worth looking into if for curiosity's sake, not what this guy is selling. but for the point that easy oil is declining in the world. and that places with a small amounts of oil relatively to the M.E. may find it rewarding in the future, if M.E. is getting more expensive to retrieve. add to the social cost of these countries and some may have to get a job. with more producers and more cost, i bet the profit margins lesson...
http://www.offshore-mag.com/articles...abia-aims.html

How much more expensive is off-shore production? And why would/should they even bother?
  • #912,706
  • Jul 27, 2014 11:13am Jul 27, 2014 11:13am
Quoting Ck87
{quote} You and I have no say where the price goes. So to answer your question, how do you manipulation a 1000 pip move? You become the central bankers that run the financial world.
What would be the point? Half retailers had margin calls when euro went from 1.27 to 1.31, there was no point to take it higher than that. It was a normal move, I don't see anything weird behind it.
Everyone can see the chart, but only a few can actually read it.
  • #912,707
  • Jul 27, 2014 12:21pm Jul 27, 2014 12:21pm
Quoting Vachus
{quote} Currently, as of today - there are no reasons actually. But by the end 2014, things could take a dramatic turn. In essence, i'm relying more on TLTRO which will help to bring interest rates on private / business loans down, which will kick inflation faster than the majority expects. The chart below is the main reason i don't commit to Draghi's argument ( Lower exchange rate, will hike inflation) * Inflation / Private loans {image} Short term, Draghi is using the exchange rate to sustain inflation headline till they finish with the AQR and...
hi,

its clear, I think, that we are drawing very different conculsions from the same data, which is fine, only time will tell... regarding a few things however...

"but i still don't understand why the Feds are being rushed into hiking interest rates too quickly."

They aren't being rushed at all... consider almost any taylor rule estimate here. They are being extremely dovish, even if they were to hikes rates tomorrow! (pic)

Furthermore, the labor market in the US, which is something they care about a lot, is doing fantastically well... and we are very close to the equilibrium rate of U/E (possible to see sub 6% next friday) so, even if growth (a terrible indicator, which is very lagging and isnt that important) is poor, labor data and inflation are perfect for more hikes. Especially as wage growth is picking up!


"What i know is, June's ECB policy is worth roughly 600 - 800 Pips, according to Goldman Sachs calculation.

10 Basis points gives roughly 200 pips,
Every 100 Billion in new loans is worth roughly 100 / 110 pips,
Total should be around 600 - 800 pips give or take,

So, IMHO markets not only priced in the negative rate, but the full 480 Euros in TLTRO which is due between September & December 2014"

Which goldman piece are you referring too, because I must've completely missed it?

I really have no idea where those numbers come from, as the ones that we calculate are quite different in fact...!!

I presume the 10bps is wrt to the base rate as well?
Attached Image (click to enlarge)
Click to Enlarge Name: taylor rule.png Size: 345 KB
  • #912,708
  • Jul 27, 2014 12:31pm Jul 27, 2014 12:31pm
@ vachus

I recommend a read through this, it might clear up some things - https://publication.sgresearch.com/e...7b4203234b2160
  • #912,709
  • Jul 27, 2014 12:48pm Jul 27, 2014 12:48pm
Quoting Aws1962
Furthermore, the labor market in the US, which is something they care about a lot, is doing fantastically well... and we are very close to the equilibrium rate of U/E (possible to see sub 6% next friday) so, even if growth (a terrible indicator, which is very lagging and isnt that important) is poor, labor data and inflation are perfect for more hikes. Especially as wage growth is picking up!
Markets don't have to wait for the FED to raise rate but the inflation and labor data are enough for market to react. Probably Bonds and Equities sell-off in the short term?
  • #912,710
  • Jul 27, 2014 12:57pm Jul 27, 2014 12:57pm
Quoting Ken A
{quote} Markets don't have to wait for the FED to raise rate but the inflation and labor data are enough for market to react. Probably Bonds and Equities sell-off in the short term?
Oh absolutely! something a lot of people forget... the secondary market rates will already be pricing in everything.

Attached is a chart of the 6M rate, 1Y forward. Not only is it quite high (0.8%) but rising rapidly.
Attached Image (click to enlarge)
Click to Enlarge Name: 1y6m.png Size: 64 KB
  • #912,711
  • Jul 27, 2014 1:13pm Jul 27, 2014 1:13pm
Quoting Aws1962
{quote} Oh absolutely! something a lot of people forget... the secondary market rates will already be pricing in everything. Attached is a chart of the 6M rate, 1Y forward. Not only is it quite high (0.8%) but rising rapidly. {image}
Don't think they forget but most only see what they want to see .....
  • #912,712
  • Jul 27, 2014 1:19pm Jul 27, 2014 1:19pm
Quoting Aws1962
{quote} Oh absolutely! something a lot of people forget... the secondary market rates will already be pricing in everything. Attached is a chart of the 6M rate, 1Y forward. Not only is it quite high (0.8%) but rising rapidly. {image}
not only that rise, but tech wise it may have broken a dt. so 1.15 may happen.. but its normal to retrace some before .575 may provide one last entry before up.
those who can, do. those who cant, talk about those who can
  • #912,713
  • Jul 27, 2014 1:28pm Jul 27, 2014 1:28pm
Also, on the other side of the equation, we need to consider EUR rates.

So here we have the 6month rate, 1year through 5 year forward laddered. (i.e. 6m 5yf is top, 6m 4yf second top etc etc down to 6m 1yf)

But importantly, what we can see is how the lines are compressing lower. (bottom pane shows the 5yf -1yf spread) This has halved so far this year, and likely to continue to tighten further, weighing on the EUR.

(*yf = years forward btw)

another way to visualize it is the second chart. just the 5yf and 1yf

This is best way imo to show the EUR forward curve. I.e. where EUR rates are going over time.. *hint - not up for A LONG time.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: EUR fwds.png Size: 97 KB
Click to Enlarge Name: eur fwds 2.png Size: 68 KB
  • #912,714
  • Jul 27, 2014 1:32pm Jul 27, 2014 1:32pm
Quoting Mr Hatch
{quote} http://www.offshore-mag.com/articles...abia-aims.html How much more expensive is off-shore production? And why would/should they even bother?
thats a ongoing discussion here, drill drill drill. it still comes down to economics.. i can drill deep water in the gulf at a 60$ a barrel cost, or do it in n dakota for 40$ a barrel.. prices are just examples. as an investor, where would you put your money?
those who can, do. those who cant, talk about those who can
  • #912,715
  • Jul 27, 2014 1:39pm Jul 27, 2014 1:39pm
Quoting Aws1962
Also, on the other side of the equation, we need to consider EUR rates. So here we have the 6month rate, 1year through 5 year forward laddered. (i.e. 6m 5yf is top, 6m 4yf second top etc etc down to 6m 1yf) But importantly, what we can see is how the lines are compressing lower. (bottom pane shows the 5yf -1yf spread) This has halved so far this year, and likely to continue to tighten further, weighing on the EUR. (*yf = years forward btw) another way to visualize it is the second chart. just the 5yf and 1yf This is best way imo to show the EUR...
on ez rates.. if the fed is pumping the system, why wouldn't that allow more usd to prop up ez bonds. and as the fed tightens it will probably equally produce less ez bond buyers, like a pin prick. this could be some tough medicine to swallow in the pig zone.
those who can, do. those who cant, talk about those who can
  • #912,716
  • Jul 27, 2014 1:42pm Jul 27, 2014 1:42pm
Quoting BogiFX
Instead of double posting the same post here on forums i will post only in my journal.Whoever wants to join please be welcome.This is not an invitation to my journal.

what a moron you are - first you set half of FF on ignore within a day, and then you spam each and every thread with this message
  • #912,717
  • Jul 27, 2014 1:44pm Jul 27, 2014 1:44pm
Quoting gatorinla
{quote} on ez rates.. if the fed is pumping the system, why wouldn't that allow more usd to prop up ez bonds. and as the fed tightens it will probably equally produce less ez bond buyers, like a pin prick. this could be some tough medicine to swallow in the pig zone.
Haven't checked the most recent numbers, but IIRC the majority of fixed income inflows into EUR bonds is from China/Japan, and less so from US

But For sure, if US starts raising rates, people will much rather recieve US rates at 3.5% vs. Bunds at 1%, so it will likely pressure ooutflows from EUR bonds into USD bonds, but not sure the size of that would be *that* significant tbh. Certainly not enough to make peripheral debt crash.
  • #912,718
  • Jul 27, 2014 1:50pm Jul 27, 2014 1:50pm
Quoting Aws1962
Also, on the other side of the equation, we need to consider EUR rates. So here we have the 6month rate, 1year through 5 year forward laddered. (i.e. 6m 5yf is top, 6m 4yf second top etc etc down to 6m 1yf) But importantly, what we can see is how the lines are compressing lower. (bottom pane shows the 5yf -1yf spread) This has halved so far this year, and likely to continue to tighten further, weighing on the EUR. (*yf = years forward btw) another way to visualize it is the second chart. just the 5yf and 1yf This is best way imo to show the EUR...
Many thanks for the chart!



Addo: It seems 3.5% is many moons away.
  • #912,719
  • Jul 27, 2014 1:55pm Jul 27, 2014 1:55pm
Quoting Aws1962
{quote} Haven't checked the most recent numbers, but IIRC the majority of fixed income inflows into EUR bonds is from China/Japan, and less so from US But For sure, if US starts raising rates, people will much rather recieve US rates at 3.5% vs. Bunds at 1%, so it will likely pressure ooutflows from EUR bonds into USD bonds, but not sure the size of that would be *that* significant tbh. Certainly not enough to make peripheral debt crash.
most markets are more fragile then most think. a drop of just a few buyers has a multiple affect. those 1% rates would have to rise until both markets reach their sweet spot. the further the rise, the more risk for pig investors. creating more rise. i am not saying crash, i am saying things may go back to 2 3 years back.. life gets harder then it is now. spain atm has a 24% unemployment rate. it just takes one bad apple..
those who can, do. those who cant, talk about those who can
  • #912,720
  • Jul 27, 2014 1:57pm Jul 27, 2014 1:57pm
Quoting Aws1962
{quote} Haven't checked the most recent numbers, but IIRC the majority of fixed income inflows into EUR bonds is from China/Japan, and less so from US But For sure, if US starts raising rates, people will much rather recieve US rates at 3.5% vs. Bunds at 1%, so it will likely pressure ooutflows from EUR bonds into USD bonds, but not sure the size of that would be *that* significant tbh. Certainly not enough to make peripheral debt crash.
Isn't China on the way to tighten as well?
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