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EURUSD Tumbles Below 1.15, Near 12-Year Lows
Things are escalating...
heading for Swap-rate-implied parity...?
Scotiabank's Guy Haselmann has some thoughts on EU moves post SNB...
The ECB has been promising sovereign QE for 7 months. It is probably fully priced in. Its main goal has been and remains to depreciate the Euro. EU country rates have already converged, so the goal in proceeding with QE is unlikely to be to try to converge them further. On the contrary, should the structure of QE indicate less EU integration, such an anti-union move should significant widen periphery spreads (despite the ECB buying them)
Draghi rarely disappoints markets but he will have his challenges not doing so next week.
Some believe that SNB’s removal of its QE is being replaced by ECB QE. I don’t entirely look at it this way, because the ECB QE is priced-in and has been well-telegraphed and expected for so long (7 months). Therefore, the market is losing SNB’s support that it had believed was going to continue as a core policy.
Hidden risks and uncertainties are growing. Negative sovereign yields and a depreciating Euro creates added problems. USD securities, particularly Treasuries that offer more yield and a strong currency, look attractive to Europeans and foreigners.
Charts: Bloomberg
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I'm sure it's all contained.
Yep, can't go past zero, all is well.
Queue ECB QE........but what if it DOESNT come??? THINK about that..........
With a pumped DAX and a weaker Euro maybe it wont.
ECB can't!!!! Fucking end of story! I'm gonna blow a coronary here. The fucking ECB has no power, no control to do such a thing. It is not legal and the day they try and pull it off, Germany (and others) are going to fucking walk from this shit show!
Why should Germans be on the hook for Italian or Spanish debt?? That has been the bone of contention for 5 years and just 'cuz Draghi is jawboning until the cows come home doesn't mean he has any real power to do it!
Draghi needs a bullet between the eyes. END OF STORY
" The fucking ECB has no power, no control to do such a thing. It is not legal and the day they try and pull it off, Germany (and others) are going to fucking walk from this shit show!"
What if the ECB really try the QE in one way or another? I think some elitist schmucks are trying brake up the current EU due internal power-struggle between the Anglo-Saxon and the old Europe elites.
BTW I agree with you with the rest of your post.
Yeah, Just like Fukushima was all contained..
We need an ice wall around Europe. That'll fix things.
we had an Iron Curtain, once, but it was not all around Europe. and no, the Roman walls weren't a solution, neither, as well as the Maginot Line
please do not suggest we push our frontiers up to the Great Wall of China
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"The ECB has been promising sovereign QE for 7 months. It is probably fully priced in. Its main goal has been and remains to depreciate the Euro. EU country rates have already converged, so the goal in proceeding with QE is unlikely to be to try to converge them further. On the contrary, should the structure of QE indicate less EU integration, such an anti-union move should significant widen periphery spreads (despite the ECB buying them) "
oh, how I love the way this guy sees it /S
so the whole point of QE is to get the EURUSD down? mission accomplished, then. thank you, no need for QE
so if "the structure of QE" is less "integration" ("anti-union" LOL), then the spreads widen? what abysmal logic, from someone that claims "it's probably fully priced in"
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"...because the ECB QE is priced-in and has been well-telegraphed and expected for so long (7 months)."
oh, well, then we can wait a few more months, can't we? moar months?
There is one very simple solution to this problem. Stack these up. ZH'ers shoujld be proud.
http://sdbullion.com/silver/sbss-silver-shield-collection/silver-shield/...
i suggest you push your frontiers up to the great wall of china.
I'm sure it's all contained.
It that you Janet Yellen?
BIS is playing a very dangerous move here
DAX is the new DOW.... Heading for all time highs (AGAIN)
Indeed it is. It is contained to this planet. The moon and Mars are gtg.
And yet Gold is rallying as well - Something very odd going on here
Simple, lifeboats are priced in gold.....
Buy the rumor, sell the fact. See this;
http://www.nowandfutures.com/images/cot/GC.png
Commercials are nearly as short as last summer. Gold fell about 14% after that.
Currencys are the new game..is everyone playing...get in now....100 to 1...go baby go
Why not just ride 'em all down?
It worked so well for the Hindenberg....
Shitz gettin real
Killing them softly.
Happy (bankster) Holidays...
sure seems like the bulls are just trying to bury their head even deeper in the sand. its still all good. spx at 2000.
You noticed the majical 2000 level to eh. Never allowed to get lower than 1 day striking distance. Its so fraudulent its laughable.
The forced liquidations haven't bled over to the S&P yet. Give it time.
Reality must be avoided as much as possible for as long as possible and maybe that tsunami will magically disappear....
sure seems like the bulls are just trying to bury their head even deeper in the sand.
Not sand, gluteus maximus.
Bullish!
THE DANSE MACABRE OF THE CURRENCIES HAS BEGUN.
Said that several times in recent years, but this is the real deal.
Could be. Just closed out everything. Fuck this for a game of soldiers.
Is the system falling apart more because of the CHF or the EUR? It is taking it in both ends. The Fed and Treasury are so smart. They will fix this by buying US stocks.
I witnessed a beautiful thing yesterday...pure, authentic, large-scale-deep-in-the-borg-with-lagarde-and-the-squid-clueless price discovery. I know I can go around the block and buy shinies from my dealer...and I discover the price at that moment. But to see bankers cold cock each other as a matter of survival suggests the next phase of the currency world war has begun. I wonder what "discoveries" will be made in the aftershock of this escalation?
...or maybe World War III does not begin with assasination or blitzkreig...perhaps it is the Currency World War...to be solved by young men following dubious orders at a date to be determined later.
Chaos...
its beautiful man...
KEEP STACKIN.
...gotta get this guillotine manufacturing thing up and running before I miss the next "economic opportunity"...
How about some pop-up roof parapets to keep the fuckers from jumping long enough to get them to the guillotines?
Good idea, perhaps a "building netting" company?
Just in time for the summer European holiday season. So much for all those typical global destinations that rely on European money. This QE isn't going to do anything, but further erode purchasing power and impoverish Europeans.
One, has no further to look than Japan. European bond yields are already at ridiculously low levels, and banks will just hoard the money to recapitalize their balance sheets. Draghi is going to have to put some sort repayment clauses on the money to force the banks to lend.
But Krugman said eroding purchasing power is the first step to increasing exports and thusly GDP. Krugman said!
YenX, you mean just like the Fed?
lol
Exactly like the Fed. After this farce of an ECB meeting next week watch how the $usd drops like a rock.
Funny, I was just thinking about orly and her call on the Euro. She finally got it right, a year or two later.
And gold to $850? Well, that's not looking so good.
Only for a few days, IMO. Then safe haven panic buying resumes. The FED is pulling in the monetary tide and no one's filling it's shoes. US Bonds/dollar higher within a deflationary context.
Maybe the will ECB surprise. It'd be the first time in over 4 years, so it is due.
Krugman missed the semester that focused on global deflation... I think he was too busy with his cat herding classes.
Russian city of Sochi (where the Olympic Games were) expected this summer two million Chinese tourists.
This is another gift for Europe from Mr Putin and Mr Xi Jinping.
If the EU will cut off Russia from the international payment system, then Russia will be cut off Europe, from supplies Russian gas on the same day.
"It's all transitory."
- Bernanke's grave stone
This all started with the words “Too Big Too Fail”. There were major flaws in the economic systems and politicians never had the fore sight or the courage to deal with the real issues.
Brussels is a machine that is hell bent on their Federal idea. There are too many large interests in Brussels on a very generous gravy train that they are not going to give up without a fight. Unfortunately this means that the average EU citizen is going to suffer for their greed and failure. The EU has decided there will be no change until they crash and burn, this is the course they are now on.
Commodity prices are collapsing which will cause issues in emerging markets and is a warning that the economy is turning down already, this will cause an event in Europe which will cause big money to panic into USD bonds which is standard operating behaviour. Demand for the USD will cause it to rise and then the 5 trillion in cheap loans throughout the world will start to explode. This will be worse than 2008 and longer. The bond market is in a bubble and then money will move into equities. There will be many sovereign defaults and about 5 years of deflation will follow with very high unemployment. They should have let the markets correct back in 2008 but now the situation many time worse
Yes, many structural problems, but you're kidding right? Fuck, politicians were/are fully owned.
why do you push that second paragraph between the first and the third? your country is part of the EU and not of the eurozone. that should give you a bit of a hint that they are two separate clubs
UK economy is DOUBLE FUCKED!!!!
Thats why lady lagarde likes to go there!
Hoping to pick up some crumbs from that mixed double on the rocks.
Brussels is a machine that is hell bent on their Federal idea?
I do not think so. Brussels - it's just the American governing body of Europe. Brussels can not be own any of their own ideas.
Screwdriver that uses hands of a master, can not have any "their own ideas."
... euronating dollar ... down the toilet ...
Let me be clear; fuck em.
thats been a long lost wish that is still in the Keystone pipeline somewhere.
In the meantime, since Lehman tore the tinsel curtain, its THEY who have been doing the f***ing at our expense, and in Greece its been gang bang style!
USD a "strong currency". Yup that is a good one. Compared to what. The other crap that is out there. Going to get interesting this year, stay tuned.
it's macro prudential
Just like Payton Manning bought a bunch of Papa Johns in Colorado before the passage of the MJ bill, I'm investing in guillotine companies.
Hell. I might even start my own.
DAX in Zimbabwe EUROS looks fabulous! How about DAX in Eurubles!!!
Zimbabwe meet Weimar meet EU
The Germans must be PISSED PISSED PISSED. For sure I AM!!!!
EURUBLES for everyone by the boat load!!!
WHAT THE FUCK!!!! WHEN IS ECB STEPPING IN AND STOPPING THIS BULLSHIT???
or maybe the ECB won't do QE because the Swiss removing the bid will allow the euro to devalue without it. Lets the Germans off the hook.
Germans will never be "on the hook" again.
Just count on that.
We quantitatively eased some folks
What's left of the markets are pricing in QE. Go long the Euro when they finally announce it.
It's all Putin's fault!
Question to the Forum :
The deliberate --or consequential fall of the EURO after SNB rug pulling-- is it going to make Grexit more probable or Greek bail-out (after severe haircut for banks) more probable?
Which way does the cookie crumble? Its what we are all waiting to see.
I guess we'll have to wait for the Draghi put and QE strut next week.
But given the market mayhem maybe some of you have crystal balls that I can't see !
I don't think it matters anymore either way. Stick a fork in it it's done.
Any Euro holders still holding on to Brussels funny money are up shit creek without a paddle.
Every European should RUN to the bank and take out what they have left, then RUN to the bullion dealer and convert to precious. If that fails, try the next best thing and convert to either USD or CHF and hold.
The EUR is finished. Faith and confidence have been completely eroded now. Not sure how all the parasites in Brussels expect to get paid going forward?
okay
I'm sure the Chinese will be happy to sell you a lot of the eggs in their USD basket.
Also, if $5 to $10 trillion dollars of QE did not not depreciate the USD, rather made it more valuable, by what stretch will ECB's QE depreciate the EUR?
I think yesterday's actions only make sense if Swiss knew that a big round of QE in Euro was coming...they are already overwhelmed trying to hold the peg as is, and would lose their shirts if a flood of new Euros were released. This was protective....it was certainly painful at their end, they aren't dumb, so it must have been the lesser of several evils.
Given that interpretation, a big round of QE in the Euro probably implies that they are yet again going to try to hold the gang together and bail-out the greeks, and do so by spreading the inflationary pain through a QE instead of taxing the germans for it all. So.... in a convoluted way, I think we can expect another greek rescue. <but i wouldn't bet on it...i'm on the sidelines here>
my $0.02 here.....
Right. Allowing Greece to exit brings the whole house of cards down. They will try to bail it out again. The Germans don't want it.
http://en.wikipedia.org/wiki/Greece_withdrawal_from_the_eurozone
In January 2015, speculation about a Greek exit from Eurozone was revived when Michael Fuchs, who is deputy leader of the center-right CDU/CSU faction in the German Bundestag, was quoted on 31 December 2014: "The time when we had to rescue Greece is over. There is no more blackmail potential. Greece is not systemically relevant for the euro." A following article in the weekly Spiegel citing sources from Wolfgang Schäuble's ministry of finance further spurred these speculations. Both German and international media widely interpreted this as the Merkel government semi-officially warning Greek voters from voting for SYRIZA in the upcoming legislative election of 25 January 2015.[21]
So, I expect QE, if any, to disappoint.Neither, i.e. no change.
The question was always if the ECB can really do QE, by either somehow having the Germans look the other way or even attempting to do it against their will.
No matter that, now that the SNB caused a massive EUR devaluation the room for the ECB to initiate QE at this time has shrunk enormously.
But that has no direct consequences for the Greek situation as it had always been more about Spanish (and Italian?) govt bonds anyway.
Maybe another Greek bailout got a bit less probable now and for the next 3-6 months.
Just working out the exchange rate for rub-dm-chf with eur-usd