It is safe to enter the water....
Wow, what a week. The market is not able to put on enough risk at the moment. Usd/Brl testing 1.8000, Turkey at 1.2000 ! At this rate everything will be a parity by Dec 1! So what next, well it seems that the Fed is now on hold. Even with a bad November job's report they will hold off pending a revision. The Sub-Prime mess is on the back burner. Yes the Investment houses are producing big write-downs (ML with over 5B) but it seems the market was expecting this and has basically shrugged it off. If this continues I think the next big trade could be long Usd/Twd (I do not have this on at the moment). It has come off sharply on the back of higher rates and rick aversion late last month (it is a big carry currency against the Asian basket). With Usd/Jpy higher at the close yesterday, we could see some follow through on the Twd in coming days.
Look for the ECB to begin talking a bit more dovishly. It seems to me that their economy is slowing and their next move in rates will be lower, so it will be important for them to begin preparing the market for this move. Could this mean the Euro could be peaking? HHMMM....well for regular readers of this Blog you know that I have been attempting to be short bothe the Euro and Gbp. In a word WRONG and Costly (OK two words). So going forward I will be looking for a place to re-sell (probably a day or so after making new highs)but cautiously. I will not allow it to run me over like the last trade.
2 Comments:
banker,
Did the recent palaver by the ECB meet your expectations - and have your expectations changed or are they the same?
energyecon
Well they have certainly been talking more hawkish then I would have thought, but no I still think the next move in rates is down and should take place in the first quarter of 2008.
Post a Comment
Subscribe to Post Comments [Atom]
<< Home