I have a hypothesis of major significance:
As the markets have seesawed for the past six weeks one asset has been consistent: the EUR/YEN cross. The SVB fallout coupled with concern about savings fleeing from other regional and community banks has subsided, allowing for the global equity markets to slough off concerns over undue leveraged risks causing further pain for investors. The Credit Suisse writedown on AT1 bonds — contingent
Tags:Bank of Japan, euro/yen cross, Federal Reserve, Japanese yen, Kazuo Ueda, YCC, yield curve control
Posted in BoJ, Central Banks, ECB, Fed | 6 Comments »
Another moment in time with Rick Santelli. We reviewed some of today’s early market reactions to the weekend events. A measure of the impact of President Mario Draghi’s ECB policy was reflected in the prices of European sovereign debt. The political news out of Spain and Italy let alone recent elections in Austria and the Czech Republic SHOULD have sent Italian and Spanish yields HIGHER but because of the ECB’s ongoing LARGE ASSET PURCHASES Spanish and Italian yields on 10-year debt actually dropped the most today.
(Click on the image to watch me and Rick discuss the weekend’s events.)
Tags:ECB, euro/yen cross, Fed, Janet Yellen, Japan, Kuroda, Mario Draghi, QE, Shinzo Abe
Posted in BoJ, ECB, Fed, Japan | 6 Comments »
Even as the rumors of a massive IMF intervention to support Italy faded into the New York close the equity were buoyed by the robust start to the HOLIDAY SHOPPING SEASON. Increased sales and no bad news from Europe left the risk on (deleveraging halted) for at least another day. The 2/10 Italian curve aided the rally as the curve MOVED 50 BASIS POINTS AND CLAWED BACK TO A POSITIVE SLOPE. IN YESTERDAY’S BLOG IT WAS NOTED THAT THE 2/10 CURVES OF THE SPANISH AND ITALIAN DEBT MARKETS WERE NOW AN IMPORTANT INDICATOR OF DEBT STRESS AND FEARS FOR THE ECONOMIES OF THOSE ON THE PRECIPICE OF CRISIS.
Tags:Ambrose Evans-Pritchard, Bernanke, Brad DeLong, ECB, Euro, euro/yen cross, Fed, holiday shopping, IMF, Italian 2/10 curve, Japanese unemployment, JGB, Myron Scholes, Nikkei, Ron Paul, swap lines, Yen
Posted in Currency, ECB, Fed, Japan | 8 Comments »
The speeches by FOMC GOVERNOR TARULLO and Vice Chair Yellen were followed up with an Obama speech on a “major” REFI operation and many articles in the media. In today’s Financial Times, Larry Summers just happened to have a piece titled, “WHY THE HOUSING BURDEN STALLS AMERICA’S ECONOMIC RECOVERY.” It seems that the administration has awakened to the fact that the credit crisis has been wrapped in a housing crunch that has kept consumer demand lackluster at best. (Also known as the Geithner plan: Aid the banks first and maybe help the debt-laden consumer/homeowner somewhere down the line.)
Tags:Bill Dudley, BOC, Cameron, Carney, deflation, Dollar, Euro, euro/yen cross, Fannie, Fed, Freddie, GSE, Larry Summers, Richard Fisher, Sarkozy, Tarullo, Timothy Geithner, Tory, U.K., Yellen, Yen
Posted in Canada, Fed, France, UK, United States | 7 Comments »
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