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by Ashraf Laidi
Posted: Feb 22, 2010 5:00
Comments: 2338
Posted: Feb 22, 2010 5:00
Comments: 2338
Forum Topic:
USD
Discuss USD
No QE3 , and time. The stock and commodity markets will need a day or so to realize the FED didn't mention neither fresh nor more liquidity. Thus short stocks
DOW NAS100 RUS2000 EURSTOX is the trade , as well as gold short etc.
Could be in the homely atmosphere of Jackson hole Dr.Ben unrolls more liquidity but until then short is the game. Especially for Eurozone that comes back into spotlight.
QE3 makes no sense at all in the light of funding the lifted debt ceiling.
4) adding TIME .element to statement by indicating Fed will hold securities for an extended period of time, or simply say they will not start selling UNTIL..GDP growth or inflation show marked improvement. The Fed could also further downgrade its growth forecasts in order to trigger mkt expectations that more further stimulus lies ahead. Although there is no FOMC meeting scheduled in August, the Fed can use the Aug 26 Jackson Hole economic symposium of world central bankers and economists to deliver an inter-meeting policy change (if markets are selling off hard as was the case in August 2007). REGARDLESS, most fixed income traders (not necessarily economists) are persuaded that a double dip is around the corner, and only full-fledged QE3 will help support stocks. ANY SIGN that Bernanke will not show this, would weigh on equities and place a temporary cap on metals to the benefit of the US dollar. Our Tuesday Premium trades hit all targets in EURGBP GBPJPY, gold..see the rest of the trades in Premium section
Ashraf
you can tell a very bad manager easily: he has just one assumption and NO fallback plan.
Is the US economy downgraded? Not at all. It is as bad as ever. Why then are UST bought and USD
when US credit worthiness is downgraded, and stocks are sold?
Think twice, that yields a fallback plan.
That must surely be a record.