Regarding yesterday’s activity –
I believe the market immediately began pricing in a BOJ cut coming up upon the FED decision. I believe without .75 algorithms responded uphill in UsdJpy as enough had been priced in, and so the focus immediately shifted to the potential of a BOJ cut. There definitely was institutional money battling on both sides a bit more than usual (I could see orders in futures/options) and the entities long forwards won the day. That is not always the case but usually so. Today they are short UsdJpy with the exception of yields, which are long on the outsides and short on the nearby’s. Part of the activity was carry adjustments as well. Just a thought.
Weekly jobless claims lower than expected
Philly Fed slight beat on upside
Continues the recent streak of better than expected US data
A look at the day ahead in U.S. and global markets from Mike Dolan
After a typical skittish first-day reaction, world markets are on Thursday embracing the new Federal Reserve stance as insurance on the holy grail of a soft economic landing.
Fed boss Jerome Powell described Wednesday’s outsize half-point interest rate cut as a ‘recalibration’ rather than some panicky emergency, and investors are taking the move as a sign the Fed will seek that new ‘neutral’ quickly without necessarily being forced into it by a weakening economy.
Morning Bid: Stocks lap up Fed’s fast ‘recalibration’, BoE up next
50pt cut joke
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From his piece: “The decision lowers the federal funds rate to a range between 4.75%-5%. While the rate sets short-term borrowing costs for banks, it spills over into multiple consumer products such as mortgages, auto loans and credit cards.”
Kids … let me remind you that the previous federal funds rate was 5.25 – 5.50
Jeff kindly reminds us that the federal funds rate is now 4-75 – 5% —– borrowing costs for banks. ROFL.
In real life banks take the higher end of federal funds rate into their accounting. Effectively, the banks are looking at at best a 25pt reduction on the spreadsheet.
This is a ridiculous calculus and basically means nothing in the real world.
Jeff is an enthusiastic peddler if one reads his headline : aggressive start to its campaign. Jerome, if you paid attention to his presser said no such thing. In fact jerome tried to reiterate that “we’re going to be making decisions meeting by meeting based on the incoming data …. that the actual things that we do will depend on the way the economy evolves we can go quicker if that’s appropriate we can go slower if that’s appropriate we can pause if that’s appropriate but that’s that’s what we are contemplating (powell around the 945 timeline)
EURUSD 15 minute chart – Amazing Trader Ladder Strategy
1) Red support lines = ladder lines
2) As long as the last red line that preceded a new high is intact (called a preceding line), risk is pointed up
3) Strategy=> buy, preferably a dip with a stop below the most recent preceding line.
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