World economy talk

[Monseratto]

Effect of stimulus wind down...bond buying up, stock sell off.

http://finance.yahoo.com/news/japan-...hTvHgAMvWTmYlQ

The U.S. bond market rallied this week on renewed safe-haven bids as well as relief buying in reaction to the release of minutes from the Federal Reserve's March 18-19 policy meeting.

The intense appetite for bonds spread into this week's auction of $64 billion worth of longer-term debt, which raised $13.5 billion in new cash for the federal government.

An MSCI benchmark of global equities fell to a two-week low, spurred by a broad risk-averse tenor among investors that led to selloffs in higher-yielding currencies and emerging market assets.

"Today's decline is what we've been seeing all week. The weakness in the biotech and momentum names is getting investors worried about where the market is headed in the near-term, eventually triggering a selloff in everything," said Robert Pavlik, chief market strategist at Banyan Partners in New York.

"Our long-term outlook on the market hasn't changed because if you understand why the market is selling off, you know it's not rational, that it doesn't make sense," he added.

MSCI's all-country world equity index fell to lows last seen in late March and was last trading down 1.0 percent.

The dollar index, which measures the greenback against six major currencies, rose 0.13 percent, and the dollar edged higher against the yen, also up 0.13 percent. The euro fell slightly after being ahead a tad against the dollar most of the session.

"Bad news for the world is good news for the dollar," said Steven Englander, managing director and global head of G10 FX strategy at CitiFX in New York. "Once fears about the equity market intensified, they picked up a more conventional type of mode to buy the dollar."

[uls]

from the article above:

The dollar index, which measures the greenback against six major currencies, rose 0.13 percent, and the dollar edged higher against the yen, also up 0.13 percent. The euro fell slightly after being ahead a tad against the dollar most of the session.

"Bad news for the world is good news for the dollar," said Steven Englander, managing director and global head of G10 FX strategy at CitiFX in New York. "Once fears about the equity market intensified, they picked up a more conventional type of mode to buy the dollar."

the dollar has been falling all week

QE taper is supposed to be dollar positive. investors built up large long positions in the dollar but the dollar went in the opposite direction

investors suffered losses as the dollar fell against all major currencies

declining US yields makes the dollar less attractive to hold

[Gumusut_Amige]

from the article above:



the dollar has been falling all week

QE taper is supposed to be dollar positive. investors built up large long positions in the dollar but the dollar went in the opposite direction

investors suffered losses as the dollar fell against all major currencies

declining US yields makes the dollar less attractive to hold

welcome back bro uls... are you implying to dump the green buck for now? Or gonna hold it until when?



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[uls]

thanks

i just think Bathory is too optimistic on the dollar but with the Fed in taper mode i wouldnt sell the dollar

[falken]

Welcome back uls.

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[uls]

thanks dudes

[Lady Bathory]

Uls, i believe yields will rise as tapering continues. The bond buying program will come to an end in October at the current pace of tapering. I think the 10-year note will be yielding 3% by then.

[dreamur]

hello 3- in-I!!!

Sent from my GT-N7100 using Tapatalk

[Lady Bathory]

The market bid up the euro as expected. Russian banks are selling dollars and buying euros because dollar-denominated assets are easier to sanction. Higher money market rates also make the euro more attractive to investors. There's nothing to push the dollar higher. The Federal Reserve is widely expected to taper asset purchases by another $10 billion. There's no sign the Fed will accelerate the pace of tapering which can push U.S. bond yields and the dollar higher.

[uls]

^^^

bet you didnt expect Germany's inflation data to cause this



wait for tomorrow's eurozone inflation data


but i agree with your view

there's strong demand for euros

[Lady Bathory]

EURUSD 1.3797 support. I'm not going to comment yet.

[uls]

waiting for eurozone CPI?

i knew this week will be less boring

[uls]

eurozone inflation is way below the ECB's 2% target

[uls]

so far EURUSD is supported at 1.38

that's as far the euro will fall considering the market is already pricing in lower-than-expected eurozone inflation and possible June rate cut

[c_cube]

Babalik ba ang 44.XX na dollar?


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[uls]

^^

i think it will

[c_cube]

^^

i think it will

Sayang! Kala ko happy na ako #ASA


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[uls]

ang kalaban -- foreign funds have returned to emerging markets which is supporting EM currencies

here i'm using EM ETFs to show funds flows



dollar-denominated EM bond ETF




local currency EM bond ETF




dollar-denominated EM sovereign bond ETF




dollar-denominated non-sovereign bond ETF

[uls]

here's one more



local currency EM sovereign bond ETF

[uls]

ang kalaban -- foreign funds have returned to emerging markets which is supporting EM currencies

here i'm using EM ETFs to show funds flows

fund flows not funds flows

failed to edit that

OC