Monday, August 07, 2006

FOMC Tomorrw

After Friday's disappointing employment number the market seems convinced that the FED will pause, and I agree. On the back of that number the Dollar took a big hit and in the big picture of things I again agree with this move. The risk that I see going forward is that the market gets a little ahead of itself. The commentary on the back of the FOMC tomorrow will almost certainly contain remarks about being ready to raise again if the numbers dictate. I am certainly looking for relativly bearish statements to balance out the "pause"

Number to number is the way of the near term future and it is the way it should be. I expect the numbers to show a slowing of growth. Inflation, at this time, I do not have a firm opinion on, but I would think that a near term spike followed by a drop would be the most probable course.

I will remain long EM currencies and small short USD, as I am going on Vacation at the end of the week and do not want to have to much on.



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