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EURCHF Harbinger Of "New FX Normal" As SNB Rams It In For 150 pips
Now that central banks are the key players in FX markets, be prepared to see such 150 pip moves all the time: the EURCHF just went parabolic as the Swiss Bank once again resets the pair. At 500x leverage, we hope you were rich before this kind of intervention... because you won't be after. Also, the reason for this mornings 8 handle move in futures is the rumor that the ECB may come out with comparable EUR intervention shortly. The ECB is vehemently denying such speculation.
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In other news the Thai stock exchange was set ablaze this morning. The U.S. futures rallied back from lows in approval.
To the moon, Alice! To the moon!
Steroids. No problem here, nope.
and here is the "old normal" at the Comex, and the situation ahead at the option expiry on Monday:
right now, the Cartel is facing quite a situation and needs to get the gold price dowwn, down, down......due to rapidly increasing demands for delivery...
here's the situation.....
Price #Calls
1100 7,105
1150 4,976
1200 18,103
1250 4,781
1300 5,306
1400 6,227
1800 5,814
ah, JPM ....this time ....so just how corrupt is the Comex and the CTFC....will they manage to get gold down to 1100 and stop all those horrible peasants from demanding delivery?
OF GOLD NO ONE BELIEVES THEY HAVE?
Is
I would love to buy at 1100.
how does this look like for silver?
Intervention: The cornerstone of any healthy breakfast.
Eat your breakfast daily. Benron must be busy.
The SNB is a clumsy source of systemic risk in Europe. Their actions in the days preceding the flash crash along with their actions on the day of the crash made them a significant factor in the crash.
So on a morning where revolt against globalism is in full evidence I expect virtually no response in markets. That's the typical post-shock denial response. But going forward expect that each successive new shock will cause deeper, faster responses.
The evidence I see suggests the SNB is scared enough of a full EUR route that they decided to see if they could knock off a few EUR shorts. Let's see how that works out.
I sure am glad I check the news over here at zero hedge and find out all the data I need for my trading day like HPQ earnings, TGT earnings, Deere earnings, zero inflation with a fed on hold forever. FAIR AND BALANCED, hell yeah. Gonna make some popcorn and watch the euro shorts fry as the ecb buys in, how about you guys? Got any hot women pics to post while masterbating over dooms day?
Selloffs in the face of good news should be telling you something, yes it's very negative around here.
I'm guessing you're taking it long in the wrong place.
DE and TGT: Negative cash flow
HPQ: Meh, bought Palm. Decline in accounts receivable. Issuing debt to buy back shares.
CPI: Made up bullshit number
The volatility is overwhelming. Gold is swining like an ape as well....
This is a 1+% move in a few seconds. Keep your eye on this one. This could presage a broader intervention effort. I doubt that the Swiss are doing this all on their own.
When the Swiss intervene the sell CHF and buy Euro. In the cross currency world this ads to demand for the /euro and it reflects back onto the dollar rate for the Euro. So what we see this morning is a recovering Euro.
I have to think that the ECB does not want to be seen in the FX markets. Once they start to intervene they can't stop. So they are letting the Swiss do it for them. Everything is dirty in this market.
...and have waiting on deck...The Bloody British? Watch for it.
Agreed, seems to be confirmed as the markets ignore EURUSD strength.
Who cares?
Unbacked debtfiat in a contractionary world is like arbing the number of angels on 2 pinheads.
Where do all these CBs get the unlimited supply of foreign reserves necessary to intervene to support the Euro? Errr, never mind...
==
Press ReleaseRelease Date: May 9, 2010
For release at 9:15 p.m. EDTIn response to the reemergence of strains in U.S. dollar short-term funding markets in Europe, the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank are announcing the reestablishment of temporary U.S. dollar liquidity swap facilities. These facilities are designed to help improve liquidity conditions in U.S. dollar funding markets and to prevent the spread of strains to other markets and financial centers. The Bank of Japan will be considering similar measures soon. Central banks will continue to work together closely as needed to address pressures in funding markets.
Federal Reserve Actions
The Federal Open Market Committee has authorized temporary reciprocal currency arrangements (swap lines) with the Bank of Canada, the Bank of England, the European Central Bank (ECB), and the Swiss National Bank. The arrangements with the Bank of England, the ECB, and the Swiss National Bank will provide these central banks with the capacity to conduct tenders of U.S. dollars in their local markets at fixed rates for full allotment, similar to arrangements that had been in place previously. The arrangement with the Bank of Canada would support drawings of up to $30 billion, as was the case previously.
These swap arrangements have been authorized through January 2011. Further details on these arrangements will be available shortly.
Information on Related Actions Being Taken by Other Central Banks
Information on the actions that will be taken by other central banks is available at the following websites:
Bank of Canada
Bank of England
European Central Bank
Bank of Japan (57 KB PDF)
Swiss National Bank (60 KB PDF)
U.S. Dollar Liquidity Swaps FAQs (51 KB PDF)
2010 Monetary Policy Releases Last update: May 10, 2010So what's up with Weber's 24 May "dramatic" development? Some kind of Mayan thing?
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aj3k4TBBBMwA
@bobby
The Mayans used criminals in their blood rituals and sacrifices-- Bernanke, Paulson, et al had better stay away from Brussels that week.
Movements in EUR/JPY is just crazy today. No wonder we have volatility in the equity market.
LOL central banks, meet the law of diminishing returns....
150 pips isn't that big a move.