Don’t you just wish that the Fed would be more consistent? The irony is that AGSP2 and SP3 both came out in last few days to say that, with rates as low as they can go they are forced to print and importantly be clear of their intentions with better communication. AGSP2’s speech was all about that clear communication!
They then both said they will be as “highly” accommodative into the foreseeable future with some goals in mind to reduce the printing rate. Then not even 24 hours pass and we get the FOMC minutes in which the opposite is discussed at board level, where Ben himself wants to taper the printers before Christmas! Is it hypocrisy? Is it brinkmanship? Neither. This article goes some way to explain it. The idiots had no idea what they were getting into with QE and now see no way out without the realization of the very painful economic conditions they are insanely trying to avoid. It is little wonder that the markets are so volatile and whipsawing in all directions. If results are anything to go by then AGSP1 and AGSP2 have failed dismally and should never be employed in a responsible position ever again, let alone the most powerful seat in the world! Yes, more powerful than the Oval Office. AGSP3 will fare no better. Most of you I guess, learnt as children that the best way to remove a bandage is to rip it quickly off. I do remember some odd kids who ripped it slowly thereby prolonging the pain. Me, I preferred to leave the wound open and let nature (a combination of sun and saliva have wonderful healing properties) take its course.
In the markets themselves we saw slightly weaker numbers in PPI and Philly Fed but slightly better dole queue in the US. So a mixed bag overnight. Stocks up a bit, gold off 1.2%, oil up 1.4%, copper up 0.9%.
I am still bullish the global economy and point to the Baltic Dry Index as my evidence. It hit highs last month and has retraced some of that but is still in great growth area, weekly chart below.
Have a lovely weekend all.
DATA HIGHLIGHTS TODAY – German Business Climate. ECB President Draghi Speech. CAD CPI & Retail sales.
AUDUSD – Broke below support convincingly and my call of 98 by Christmas is looking decidedly incorrect.
EURUSD – With a large seller bar and now a LHLL but buyer bar I am staying out of this one until a clear trend can be seen.
GBPUSD – Wandering lost still so stay away, play it against other crosses.
NZDUSD – Tested support well, will be interesting to see if it breaks it and cycles under to retest for a short trade, or will it now range back up to 85.
USDCAD – Is breaking higher and whilst I did not like the daily action, would be interested in this in lower timeframes as momentum is far from exhausted.
USDJPY – As if the BOJ were going to do any other action. So now we have good strong price action above 100 finally. Will look for a pullback/retest of this level then be getting long with it.
GOLD – There is minor support at Jun low’s but this is probably looking at $1,000 before it sees $1,600