Monetary Policy

The Triumph Of Hope Over Experience

All is probably not well. That may not become obvious just yet in the very near term, but if the trends depicted below continue, various bubble activities will get into severe trouble as the year progresses. It may finally be time to batten down the hatches.

Oil Fireworks Unsettle Global Markets Ahead Of Payrolls Report

With all eyes on crude, following last night's mini flash crash which sent WTI lower by 3% from just above $45 to under $43 in under 10 minutes, equity markets, generally quiet overnight, have taken on a secondary importance ahead of today's key risk event, the April payrolls report. In global equities, Asian and European stocks are lower, while S&P futures are little changed.

One Trader Asks: "Is Time To Stop Worrying About The Euro?"

"It’s time for markets to start considering the single currency’s long-term appreciation potential, at least versus developed market peers. The one thing genuinely holding it back are the large negative real yields. But as the structural problems fade into history, monetary policy will similarly adjust in the months ahead. Those who trade on systemic market risks need to know when their expiry date has passed."

Chris Whalen: "The Dollar Super-Cycle Ends"

It seems that many market indicators such as the dollar and LIBOR suggest a market that is either schizophrenic or dysfunctional.  Our guess is the latter...