What's Priced In?

Tyler Durden's picture


There is a glaring divide between the G10 and Emerging Market economies in terms of what monetary easing is priced in - and what is not. Specifically, as Citi notes below, traders 'expect' the US, Europe, and Canada all to be tightening (raising rates) within 18 months, while expectations are for Australia (and the rest of the China-reliant nations across Asia) to see notable easing in that period - and already priced in. Brazil is the standout as far as 'inflation' fighting rate rises just as Eastern Europe is priced for the most 'easing' of rates. It seems clear that not every stimulating headline has the same value with this much EM easing priced in already - and hope priced into DMs.


Developed Markets (how many bps are ST rates expected/priced-in to move)


Emerging Markets (how many bps are ST rates expected/priced-in to move)



Source: Citi

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Mon, 08/27/2012 - 16:00 | 2741769 Popo
Popo's picture

''Specifically, as Citi notes below, traders 'expect' the US, Europe, and Canada all to be tightening''



Mon, 08/27/2012 - 16:01 | 2741781 SilverTree
SilverTree's picture

We built this Citi, We built this Citi, We built this Citi, on......

Mon, 08/27/2012 - 16:26 | 2741862 Ruffcut
Ruffcut's picture

What is priced in?

Big ass bundles of dog turds, wrapped with a pretty bow.


Mon, 08/27/2012 - 15:59 | 2741775 LawsofPhysics
LawsofPhysics's picture

Got Physical?  That is the only thing you should be pricing in.  Gold now a "tier one" asset in all the western world. "Shocker".

Mon, 08/27/2012 - 16:09 | 2741804 Manthong
Manthong's picture

Just wait until everyone learns how much of a stealth tier one has been built up in the east.

Mon, 08/27/2012 - 16:31 | 2741876 Ruffcut
Ruffcut's picture

Physical shitical. IT ain't gonna save shit. 

Go have continued circlejerks in joy of physical.

If the 99.9% of electronic cash goes down. physical will only apply to lead and food.

Shut the fuck up, already and pray the electronic ponzi maintains, or kiss you golden ass, GOODBYE.

Mon, 08/27/2012 - 16:59 | 2741941 Panafrican Funk...
Panafrican Funktron Robot's picture

So, after you've stocked up on lead and food (and other personal survival mechanisms), how are you hedging a potential fiat meltdown?  How are you storing your wealth?

Mon, 08/27/2012 - 17:35 | 2742002 Rainman
Rainman's picture

raises hand....farmland with water

Mon, 08/27/2012 - 16:03 | 2741780 spastic_colon
spastic_colon's picture

there will be some "stealth" tightenings eventually and only TPTB will be able to front-run them

Mon, 08/27/2012 - 16:05 | 2741782 hedgeless_horseman
hedgeless_horseman's picture



ZION Bancorporation's internet-banking upgrade still has business customers offline for the fifth consecutive day.  ZION down 3.25% over those five days.  Huge loss of good will priced in?

Mon, 08/27/2012 - 16:04 | 2741794 Hype Alert
Hype Alert's picture

Specifically, as Citi notes below, traders 'expect' the US, Europe, and Canada all to be tightening (raising rates) within 18 months


Unpossible, interest payments are a killer.

Mon, 08/27/2012 - 16:11 | 2741809 Bam_Man
Bam_Man's picture

India has a massive inflation problem and a currency in the process of collapsing, yet the forecast is for their short-term interest rates to DROP by 50 bps?


Since there is apparently no problem that cannot be solved by lowering short-tern interest rates, the "long range forecast" should be for interest rates globally to eventually converge at zero.

Mon, 08/27/2012 - 16:16 | 2741831 WhiteNight123129
WhiteNight123129's picture

How about losing control of the yield curve? You losen up and then the market says enough, and then you monetize to prevent yield to go up, and the market says even more loudly enough? How is it priced in so far?

Mon, 08/27/2012 - 17:50 | 2742028 Racer
Racer's picture

And with interest rates for the less well off sheeple at 7%+ at the very best if you are lucky  to... for the poorest at 2000+%, all very well ZIRPs and NIRPs but the only trickle down to us 99.9% minions all, is yellow

Mon, 08/27/2012 - 18:26 | 2742114 Tombstone
Tombstone's picture

Most of the trading is done by computers which are in and out so fast that they don't have time to price anything in.  These machines are trading in the moment based on price action and not on the news or predictions thereof.

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