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How Traders Are Preparing For The Rate Hike: "It's A Good Time To Beat The Crap Out Of A Punchbag"
Summing up the anxiety ahead of today's Fed decision - which talking heads just this morning explained is "priced in" and is a "non-event... been so telegraphed" - market professionals believe "it seems a good time just to go and beat the crap out of a punchbag." As Bloomberg reports, real traders say they "just don't want to do any damage today," as they trade around the events, "I think we're going to see a lot of volatility," and Treasury risk is already spiking to 5-month highs.
Despite a baked-in-the-cake 76% probability of a 25bps rate hike, no one knows what the effect of a move in rates will be after such a period of ZIRP and excess monetary policy. With estimates of up to $1 trillion of liquidity withdrawals expected via reverse repo to 'enable' this rate move, as Bloomberg reports,
For Alan Clarke, an economist at Scotiabank in London, there’s nothing like a little simulated violence to calm his pre-Fed jitters.
Bankers worldwide will be hitting gyms, beating the sun up and burning the midnight oil in preparation for the most hotly anticipated Federal Reserve decision in years.
“It seems a good time just to go and beat the crap out of a punchbag,” said Clarke, who plans to spend a few hours at 1Rebel gym before heading back to the office for the announcement.
Still think it will all be calm and priced in? Treasury market volatility has surged to 5-month highs as traders brace...
The statement is scheduled for 2 p.m. in Washington followed by a briefing from Chair Janet Yellen, meaning a late finish in Europe and an early start in Asia for those who need to live it in real time...
“You don’t want to do any damage,” said Barra Sheridan, a rates trader at Bank of Montreal in London. “That’s the biggest risk today, trading in and around these events.”
John Gorman, a Tokyo-based bond trader at Nomura Holdings Inc., one of the 22 primary dealers that trade directly with the U.S. central bank, is setting his alarm for an extra early start so he can be ready for the 4 a.m. showtime.
“I feel like I want to be there for it,” Gorman said. “It’s simply uncharted territory. I think we’re going to see volatility as a result.”
Expected price swings in the dollar against the euro overnight jumped on Wednesday to almost double this year’s average.
Bernard Sin, head of currency and metal trading at MKS (Switzerland) SA in Geneva. “There’s nothing you can do, but sit and wait. A lot of people will be working late this evening.”
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But it's all priced in, so don't worry.
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The Fed is about to unleash the new Interest Rate Policy – “Don’t ask, don’t tell”. ;-)
Looney
"Punchbag", is that the new slang for banker?
Poor poor fucking skimmers. Was this supposed to generate sympathy for them?
pods
25 bps is nothing for the markets. This is way overblown as the bankers want it to be....... so they can skim even more money.
It's simple really..... https://www.youtube.com/watch?v=YgYEuJ5u1K0
I actually think they might raise rates. If they chicken out again it would mean zero credibility from here on out.
there's going to be a whole lotta dead muppet when the Fed does nothing again
I sometimes think Janet Yellen is the most important man in the world.
I saw Sant'ie clause on main street in NYC with a beer in his hand.
PPT doing a good job keeping everything green, maintaining a +30 dow for the last hour........
Wow those boys are good!
bullish for stawks for sure….rate hikes please!
"Puerto Rico said it won’t make a bond payment due Saturday, putting the commonwealth on a path to default and promising to initiate a clash with creditors as it seeks to renegotiate its $72 billion of debt. The government doesn’t have the money for the $58 million of principal and interest due on Public Finance Corp. bonds, Victor Suarez, the chief of staff for Governor Alejandro Garcia Padilla said during a press conference Friday in San Juan. “We cannot make the payment tomorrow because we do not have the funds available,” Suarez told reporters. “This payment will be made as we address how to restructure the government’s debt prospectively.”
The default marks an escalation in the debt crisis that’s been racking the island, where officials are pushing for what may be the biggest restructuring ever in the municipal market. Puerto Rico bond prices have slipped amid speculation that the island won’t be able to repay what it owes as its economy stagnates and residents leave for the U.S. mainland."
http://www.bloomberg.com/news/articles/2015-07-31/puerto-rico-official-s...
Um...all you have to do is buy the dip, whats so hard about that??
For fucks sake it's a measly 0.25%. off of zero. If the fed had any cred/balls they would take it to 0.5
Rate hike, DOW +400 pts, Gold slammed, FED statement dovish, housing prices shoot to the moon. Thats my call. I hope I am wrong.
I agree that will be the outcome today..... but tomorrow and the rest of the week will be a different story!
Vix slammed to bargain basement.
BTW, where is that fucker Hillsenrath (not sure on the spelling). I havent heard any comments from that cunt in awhile.
housing prices shoot to the moon.
So we'll all be paper rich to go shopping at Wal-Mart?...Ill pass on that ATM ticket, no thanks.
So no rate hike, and watch that vol in treasuries get smashed. Also those USD longs will be slaughtered.
Everybody is convinced there will be a small hike. That is truly already priced in... in the treasury market, the stock markets, and the dollar. So when they hike I think the dollar might do a quick burst upward to clear out stops and then it drops. Same with the stock markets.
But if they really surprise the hell out of the markets and do nothing... double what I said above. So I think either way, the dollar and stocks are about to enter into a period of decline. Maybe a big one but more likely a decline only lasting 3 months or so. At least that's what the charts of the dollar and the Euro are suggesting (to 'me' at least... I could be dead wrong). But I've been studying TA for decades and 'I think' that's what I'm seeing.
The Fed has a history of tightening too little and too late. I distinctly remember that being the case in the early 80's. But back then things were entirely different. Inflation truly was raging. Today it is not. The tightening today is for all the wrong reasons and at the worst possible time in economic history. The Fed is truly trapped.
So just for shits and giggles, I'd like to see what happens if they were to show a little sense of humor for a change and surprise the markets with a hike to 4%. That would light off a few fireworks I would think :-)
Quick, smash precious metals......
The fuck?
https://www.tradingview.com/x/psxgcefo/
Clear as day Market intervention going on..Someone was given the signal to dump the price lower before the announcement.
They don't need any particular reason to smash PM's these days, but this does look like a case of someone trading on some inside information ...
Yup, gold is being slammed. So far so good in my prediction.
Wall Street traders left early today for a 5 martini liquid lunch and will be Bangin' 7 gram rocks in men's room ahead of today's Fed announcement at 2PM.
Party's over boys. It's time to sober up and take it up the ass like the rest of us have been doing for the past 7 years.
HANG THE FED !
7 gram rocks? Have you seen the fro on that guy?
Yea, he's a Wall St, hipster but he gets good shit, almost pure,,,
A whole lot of folks getting all wee-weed up for a tiny little shit rate hike.
Which they most likely will not do anyway!
Good lord, what if it was a whole half point, they'd start jumping?
Now that would be sweet!
he he. Feels like I am a child at christmas again. Oh, what's santa gonna bring me. Bag of chimney soot?
I don't have a punchbag. How about I just beat myself?