World economy talk

[uls]

US dollar round trip

[Lady Bathory]

The U.S. dollar is overbought and due for a correction.

[dreamur]

^^the story about a lady passenger from Perth ***ually assaulted by a MAS chief steward added insult to injury.

I think therefore I am...

[uls]

[Lady Bathory]

The Japanication of the Eurozone

[uls]

The Japanication of the Eurozone

the eurozone economy is resembling Japan's lost decade/s

[uls]

ECB QE soon

BlackRock Hired by ECB as ABS-Program Consultant - Bloomberg

The European Central Bank hired BlackRock Inc. (BLK), the world’s biggest money manager, to advise on developing a program to buy asset-backed securities.

ECB President Mario Draghi said in June that the central bank is intensifying preparations to purchase ABS as it strives to revive the faltering euro-area economy. The measure could help revitalize a $1.9 trillion market that has contracted 34 percent since 2009, and may ultimately be a part of a large-scale program of quantitative easing.

[uls]

Russia has invaded Ukraine

Russia and Ukraine are at war but the EU & US are reluctant to say so

--


Yields continue to go south

US 10Y 2.33%

German 10Y 0.88%

[Lady Bathory]

Eurocrisis is not over.
The euro zone: That sinking feeling (again) | The Economist

and Hello Kitty is a cat!
Don't Be Silly, Hello Kitty Is a Cat

[tidus1203]

In a statement following the Philippine Statistics Authority’s announcement of continued and higher growth in the April-to-June period, central bank Governor Amando M. Tetangco Jr. lauded the country’s performance, saying the continued economic expansion gave the BSP ample policy space to make appropriate adjustments as and when required.

“The robust second-quarter growth despite strong base effect shows the country’s continued resiliency,” Tetangco said.

“It, likewise, backs the BSP’s view that the economy has the capacity to absorb the recent adjustments in policy settings,” Tetangco added.

Q2 results prove economy can absorb hike in policy rates - BSP | ABS-CBN News

Now we know the trajectory of local interest rates... That should put constant pressure in USDPHP.

[Monseratto]

BBC News - Brazil's economy falls into recession, latest figures show

Brazil's economy falls into recession, latest figures show

Brazil has fallen into recession, just a month before the general election, latest figures show.

Economic output, GDP, fell by 0.6% in the three months to June, worse than analysts had predicted, and revised figures for the first quarter of the year also showed a fall of 0.2%.

A recession is usually defined as two consecutive quarters of contraction.

[Lady Bathory]

August was a great month to be long USD. Investors bought dollars regardless of strong or weak U.S. economic data. The strong demand for dollars wasn't due the improving U.S. economy but due to the lack of alternatives. The U.S. economy is moving in the right direction while the economies of Europe and Japan are slowing down. The Fed is in the process of unwinding QE while the ECB is preparing for QE and there's no end in sight for the BoJ's QE.

[uls]

yep

as one source of global liquidity is turned off another source will be opened

[Lady Bathory]

Euro short positions are at a 2-year high. The market is expecting a big announcement from the ECB today. If the ECB fails to deliver, a massive short squeeze could send EURUSD back to 1.33. At this time, QE is not yet possible but Draghi could preannounce plans for QE. The market won't be impressed by anything less than that.

[jhnkvn]

Euro short positions are at a 2-year high. The market is expecting a big announcement from the ECB today. If the ECB fails to deliver, a massive short squeeze could send EURUSD back to 1.33. At this time, QE is not yet possible but Draghi could preannounce plans for QE. The market won't be impressed by anything less than that.

Lady, isn't it the other way around? That if the ECB delivers upon its announcement then a short squeeze would send the EURUSD higher. A short squeeze is usually acted upon a positive development after all. Correct me if wrong

[jhnkvn]

Never mind, wrong context pala. The correct context is that if the ECB fails to deliver QE, then a short-squeeze will ensure. But if the ECB delivers QE, this will further depress the supply side and send it further down.

[Lady Bathory]

The ECB delivers. They will begin QE in October.

ECB will start buying ABS, covered bonds in October

FRANKFURT (Reuters) - The European Central Bank will start buying securitised loans and covered bonds next month to help unblock lending in the euro zone, ECB President Mario Draghi said on Thursday.

"The Governing Council decided to start purchasing non-financial private sector assets," Draghi told his monthly news conference after the ECB unexpectedly cut interest rates to new record lows.

He said the bank would buy broad portfolios of simple and transparent asset-backed securities and of euro-denominated covered bonds from October, with full details of the new programmes to be given after the ECB's next meeting on Oct. 2.

EURUSD falls to 1.30.

[Lady Bathory]

Never mind, wrong context pala. The correct context is that if the ECB fails to deliver QE, then a short-squeeze will ensure. But if the ECB delivers QE, this will further depress the supply side and send it further down.

After falling from 1.34 to 1.31 in a month's time the market is still shorting EURUSD going into the ECB announcement. The market is expecting the ECB will announce additional easing measures which should weaken the euro further. If the ECB doesn't announce anything new there will be a mad rush to buy euros (short squeeze) which will send the euro higher.

But the ECB did announce additional easing measures (a rate cut and QE in October) which sent EURUSD lower.

[Lady Bathory]

The U.S.Dollar is still driving higher this afternoon. The overall strength of the dollar is seen in all crosses. The dollar is being driven higher by the recovery in U.S. yields. There's concrete belief that the interest rate differential between the U.S. and the rest of the world will be in the dollar’s favor. Last Friday’s non-farm payrolls report will not deter the Federal Reserve from ending asset purchases in October. I do not expect a Fed rate hike anytime soon but the shift in the yield curve makes the dollar more attractive.

The rally in the dollar is pushing down commodity prices across the board. We're seeing big losses in Brent crude, natural gas and nearly the entire agricultural complex.

[Monseratto]

Emilio Botin passes away...

(Reuters) - Emilio Botin, one of Spain's most powerful men who transformed Santander (SAN.MC) from a small domestic lender into the euro zone's biggest bank, has died of a heart attack, aged 79.

Santander patriarch Emilio Botin dies aged 79 | Reuters