Quantitative Counterfeiting Forever
September 18 2012 9:35 AM EDT
Last week, Fed Chairman Ben Bernanke announced that the central bank would launch an unprecedented form of quantitative easing. This "new and improved" iteration of money printing will be without limit and duration. The Fed Head launched QE III ($40 billion of MBS purchases every month) on September 13th and stated that it will remain in effect until the labor market "improves substantially." He also promised that, "The Committee will continue its purchases of agency mortgage back...
London Session: Bernanke brings all the booze to the party
September 14 2012 7:16 AM EDT
Markets like what they heard from Fed Governor Ben Bernanke yesterday and the extension in the risk rally has gathered speed this morning. After a slight pullback where we saw the dollar stabilise earlier, it is once again coming under pressure. However, the dollar index is down nearly 6% since the end of July and it is starting to look extremely oversold so be aware of a sharper pullback in the near term. This would not mean that the rally is over, merely that the market has over extended itsel...
Asian Shares Hit 4-Month High, Dollar Weak On Fed Action
September 13 2012 9:00 PM EDT
Asian shares rose to a four-month high Friday while the dollar remained weak against other major currencies after the U.S. Federal Reserve announced an aggressive new stimulus to drive job creation in the U.S. economy.
QE3 – Fed to buy $40 Billion in MBS each Month
September 13 2012 2:25 PM EDT
The deed is done. What the market has been pricing in and what Wall Street has been hoping for has arrived. The Fed is to undertake $40 billion a month in purchases of Mortgage Back Securities, as stated in the latest FOMC press release.
Fundamental Update: Initial thoughts on the FOMC decision
September 13 2012 2:20 PM EDT
Financial markets can't seem to decide if this evening's Fed announcement is good or bad news for financial markets. Here is what the Fed has decided to do: 1, QE3: this will entail purchases of $40 billion of mortgage-backed securities each month - these purchases are unlimited and will depend on future labour market data. 2, The pledge to keep interest rates at 0-0.25% has been extended to 2015. 3, There will be more Operation Twist, focusing on extending the banks' ownership of long-...
US Fed to Print New Dollars, Buy Mortgages
September 13 2012 1:41 PM EDT
The US Federal Reserve launched another aggressive stimulus program Thursday, saying it will buy $40-B of mortgage debt per month and continue to purchase assets until the outlook for jobs improves substantially.
FX News: EUR, USD, GBP, RMB
September 13 2012 8:01 AM EDT
The euro held near a four-month high on Thursday after Germany's Constitutional Court gave the green light for Berlin to ratify the euro zone's permanent rescue fund, looking to extend gains further on ossible stimulus from the U.S.Fed. EUR at $1.2919 in Asian trade, up slightly from late U.S. levels and near four-month highs of $1.2937 hit a few hours after the German ruling .
USA Developing a New Sovereign Debt Financial Crisis
September 12 2012 11:19 AM EDT
A year ago, Moody's cut its outlook on US debt to "negative," which acts as a warning that it might downgrade the rating, after partisan wrangling over raising the US debt limit led the nation to the brink of default. Rival agency Standard & Poor's took the drastic step of stripping the government of its "AAA" rating on its bonds around the same time. Fitch Ratings issued a warning of potential downgrade.
Counterfeiting Cruises to Nowhere
September 12 2012 8:58 AM EDT
The European recession, which continues to steepen, has already caused the ECB's Mario Draghi to promise to purchase unlimited quantities of bonds with duration of 1-3 years on the secondary market. Mr. Draghi plans to "sterilize" these purchases by auctioning one-week term deposits to banks. But there are two problems with this form of sterilization. The first is there is no guarantee that private banks will hand over all of their newly printed money back to the ECB. Instead, they may ...
USD, RMB US says, China’s debt holdings are not a threat
September 12 2012 3:57 AM EDT
China's holds more than $1.3-T in US debt and the prospect that it might suddenly withdraw funds do not pose a national security threat, according to a new Pentagon assessment. "China has few attractive options for investing the bulk of its large foreign exchange holdings out of US Treasury securities," given their extent, according to the report. China is the 2nd-largest holder of US government debt after the US Federal Reserve.
Asian Currency Preview, Baht, SGD, RMB, Peso, Ringgit
September 10 2012 11:08 AM EDT
China has introduced reforms to increase the use of its yuan in global trade and investment, Beijing has imposed stringent restrictions and the process of buying its government debt is viewed as extremely complicated.
Shayne Heffernan: 10 Best Candlestick Patterns
September 08 2012 5:14 PM EDT
There is a wealth of information available online and in Bookstores that will teach you the details of using Candlesticks as indicators. The following are 10 candlestick patterns that have in my own experience produced consistent results. These will work better when you understand what is happening in each pattern.
NFP – Reactions in Gold and Silver Reflect QE3 Expectation
September 07 2012 10:19 AM EDT
The first Friday of every month is the day for the previous month's Job data in the US (expect some times when the first is Friday). The 9/7 NFP release for August showed that 96,000 jobs were added in the month, which was down from July's 141,000 (revised down fro 163,000). The 96K also missed forecasts of 123K. The unemployment rate dropped from 8.3% to 8.1%, though when you break down the numbers, a big factor of this is due to lower participation rate - the 368K that left the workforce...
Draghi to Begin Massive Money Printing in Europe
September 06 2012 4:33 PM EDT
Economist Shayne Heffernan looks at the European Master Plan. The European Central Bank agreed to launch a new and potentially unlimited bond-buying program despite the fact that they are operating with very limited reserves, what does this mean? It means the ECB will begin the biggest Money printing exercise in History. "No ex-ante quantitative limits are set on the size of outright monetary transactions," said Draghi as he readies the printing press.
ECB Press Conference: Live (concluded)
September 06 2012 9:40 AM EDT
Watch Draghi deliver his post ECB meeting statement, and answer questions in this press conference LIVE: 9/6/2012
The Leader in Intraday Trading Tools: Autochartist
September 06 2012 4:14 AM EDT
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BoC Statement – USD/CAD Reaction and Integrity of Near-term Channel
September 05 2012 10:20 AM EDT
The Bank of Canada held its overnight rate at 1.00%. The market did not expect a change in rates but a general consensus is that the BoC will be the central bank in the G7 nations to raise rates. The BoC statement released was indeed hawkish. Even though it noted global headwinds, it explained that domestic demand has kept the Canadian economy afloat. In fact It stated:
Research Note: The ECB to the rescue?
September 05 2012 7:57 AM EDT
This Thursday 6th September 2012 the ECB announces its interest rate decision at 1245 BST/ 0745 ET. The market consensus (as measured by Bloomberg) is for a 25 basis point cut to 0.50% from 0.75%. The main event will be ECB President Mario Draghi's press conference at 1330 BST/ 0830 ET.
Assessing Bernanke?s Speech at Jackson Hole
August 31 2012 12:43 PM EDT
The market was highly anticipating Bernanke's speech at Jackson Hole, specifically to see if he would signal the launch of QE3. Recent FOMC meeting minutes showed heightened concern of the weak employment situation, and therefore showed more prospect of QE3. Today (8/31), Bernanke delivered a speech on this matter as well.
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August 28 2012 8:49 AM EDT
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