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One Minute Macro Update
US: Markets bulled up in the AM as they await their QE and low rates ‘morphine’ from the FOMC meeting statement later today (recall our comparison that QE is like morphine – it feels good in the short term, but you are only getting it because you are in severe pain – see QE Morphine published November 4, 2010). The tone of the statement will be key as a more bullish stance might shift the market to consider stimulus withdrawal impacts, while a continuation of the dour tone so popular as of late might cause a further USD slide. Yesterday’s slightly bullish performance in equities was topped by a strong Treasury rally that seemed to be more stimulus driven than fear hoarding. Case/Shiller showed no significant surprises, other than the continued home price spiral being slightly slower than expected. Today is all about the Fed, with MBA Apps and New Home Sales a meager appetizer before the afternoon main course. State of the Union last night was also supportive of a more fiscally conservative White House stance.
Europe: The political undulations continued with the voting 80 to 78 in favor of the Irish finance bill. The changes in political power in the EMU are a constant source of market movements, and this one was no different. Failure to pass the bill in Ireland would have seemingly negated the entire Irish bailout package. Irish elections set for February 25. German bund auction illustrates the rising rates in the core countries versus some recent stability in the periphery as the belief of fiscal unity continues to permeate the market and drive spreads in. BOE minutes show the same three-way policy split observed in prior releases. The minutes further show concerns about EMU woes and a fear that the market might misinterpret a rate hike. German December Import Price Index MoM 2.3% v 1.2%E, YoY 12.0% v 10.8%E. Yearly increase the highest in nearly thirty years.
Asia: China 7D repo rising 17bp to 7.82% ahead of the New Year. China Securities Journal reporting some banks may have been raising lending rates well ahead of the benchmark rate rises. JPY Finance Ministry cutting economic assessment for first time in 7 Qs while BOJ is more confident about the overall outlook.
From Brian Yelvington of Knight Capital
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"more fiscally conservative White House stance." Is that anything like a Senatorial Airport Mensroom Stance? Get real.
Nice reference cossack.
+3 shakes and a squeeze!
ORI
is it just me? or did 4 republicans...
nixon, gold standard...
regean, structured debt run up...
daddy bush?
lil bush?
lil bush part duex in technicolor.. I guess he is a dem..
but.. is it just me? or does anyone here really think the sales pitch from the republicans.. which turned into a $50b cut back (out of $3T - $4T) is just more hope for change that will be lobbied away?
I look forward to the responses.
EURUSD
http://99ercharts.blogspot.com/2011/01/eurusd_26.html
http://www.zerohedge.com/forum/99er-charts-0
JW for you: in a smoke filled room the elite bankers enjoy a fine cigar and brandy..laughing at the strident Dems and Repubs..they mock the vote..one says" we put in who we want, the chumps get to vote for two of our guys, and still they think party matters..our plan to keep em dumb worked far better than we hoped..hope and change LOL LOL ..echos in the expensive halls..
"State of the Union last night was also supportive of a more fiscally conservative White House stance."
Tyler, not sure if we saw the same SOTU. Come on, you can't serious believe this statement.
....hope TD meant "more of the same" dovish mentality and we must invest for the children and the FUTURE. My God I'm ready to puke! Ryan was not convincing either despite his humanitarian pledge towards human life and Ms Giffords.
There's no solution except for a Black Swan" type since the "anticipation method" clearly doe snot work.