Archive - Sep 21, 2015

"In such a downside scenario there could be pressure on the central bank to provide about 10-12% of GDP in reserves to the market to offset outflows as well as hedging demand (which could be met by intervening in forward markets). This is roughly USD1.0-1.2trn – that would be about 30% of its current reserve portfolio."

Golfball diplomacy...

• Fed is out so...BOJ brainstorms stimulus overhaul as options dwindle (Reuters)
• And... Yellen Pause Ups Pressure on Draghi as Global Pessimism Mounts (BBG)
• But... Eurozone Nears Limits of What Monetary Policy Can Do (WSJ)
• Global shares struggle on global growth concerns (Reuters)
• VW's Emissions Cheating Found by Curious Clean-Air Group (BBG)
• David Cameron allegedly fucked a dead pig's head (Mirror)

After sliding early in Sunday pre-market trade, overnight US equity futures managed to rebound on the now traditional low-volume levitation from a low of 1938 to just over 1950 at last check, ignoring the biggest single-name blowup story this morning which is the 23% collapse in Volkswagen shares, and instead have piggybacked on what we said was the last Hail Mary for the market: the hope of more QE from either the ECB or the BOJ. Tonight, it was the latter and while Japan's market are closed until Thursday for public holidays, its currency which is the world's preferred carry trade and the primary driver alongside VIX manipulation of the S&P500, has jumped from a low of just over 119 on Friday morning to a high of 120.4, pushing the entire US stock market with it.

Gold had a 3 percent weekly gain and silver had a 3.5% weekly gain. Gold ended with a gain of 0.73% on Friday while silver rose to as high as $15.43 before ending with a gain of 0.26%.

Don't trade yesterday’s news. There was backwardation. However, it's a sensitive indicator and you need an updated picture before buying after a sizeable price move.