Posted Dec 18, 23:43

Fundamentals Displaced by Sentimemt, BoJ Next

Fed's Evans Speech Dec 19 15:00
Markit PMI Composite (DEC) [P] 53.8
Markit Services PMI (DEC) [P] 53.6
Philadelphia Fed Manufacturing Survey (DEC) 24.5
22 hours ago: 

Year-end is near and that means flows dominate rather than fundamentals. The S&P 500 roared higher while GBP led and CHF lagged. The Bank of Japan decision is up next. 5 trades from the Premium Insights are currently in  progress, 4 of which are in progress. USDJPY and AUDCAD are the trades with the most in the money with more than 200 pips each.  1of the EURNZD longs hit all targets, with the other in progress in the red. 

There is no coherent way to explain all the market reactions before and after the FOMC decision. If Yellen was dovish, the stock market rally makes sense but the rising dollar and yields don't make sense. If she was hawkish, why did the S&P 500 complete the best two-day rally since 2011? The nature of markets is in flux and not every market moves can be tied to the latest news.

PREMIUM INSIGHTS Update: Dec 17, 18:18
SNB’s negative rates panic not enough Dec 18, 2014 17:35: 

Today's SNB entry into negative rates will not be enough. Just as the SNB was forced into a series of interventions in summer 2011 before eventually formalizing the 1.20 peg, more will be needed to maintain the peg and combat a fresh onslaught of risks such as deflation-inducing oil collapse, event risk in Russia, uncertainty in Greece and exported deflation from China. Full chart & analysis.


Yellen Lends USD a Hand Dec 18, 2014 0:54: 

The FOMC statement essentially retained the bias to keep rates low for a 'considerable time' but Yellen added some hawkish hints in her press conference. The US dollar surged after the announcement while JPY lagged on risk appetite but the Fed wasn't the only reason why. In early Asia-Pacific trading, New Zealand GDP beat expectations. Our AUSUSD Premium trades issued prior to the Fed statement are in the money as are USDJPY, USDCAD, UDCHF and EURNZD.