for what it's worth, I have seen a guy playing that kind of correlation in the nineties for a small Belgian broker, he used CAC versus S&P's, the game lasted for about a year untill he got fired, in the meantime he managed to blow up about 13 million euro's ... maybe not the wisest game in town ... ?
Short DAX at 7740
- Thread starter ASusilovic
- Start date
Currency movements play an important role in the overall performance of FDAX. You should implement a "curreny mulitiplier" into any kind of "correlation" trading...
Weber Says ECB Could Offer Banks Longer-Term Loans
European Central Bank council member Axel Weber said the bank will lower interest rates again and may extend the maturities of its loans to banks to push down long- term borrowing costs.
The ECB still has âroom to maneuverâ on interest rates âwhich we will use,â Weber, who heads Germanyâs Bundesbank, said in a speech in Berlin today. In addition, offering banks loans for longer periods may âcontribute to a desired flattening of the interbank yield curveâ and âcould help to guarantee financing security,â he said.
European Central Bank council member Axel Weber said the bank will lower interest rates again and may extend the maturities of its loans to banks to push down long- term borrowing costs.
The ECB still has âroom to maneuverâ on interest rates âwhich we will use,â Weber, who heads Germanyâs Bundesbank, said in a speech in Berlin today. In addition, offering banks loans for longer periods may âcontribute to a desired flattening of the interbank yield curveâ and âcould help to guarantee financing security,â he said.
QE is a further positive step...
The launch of US quantitative easing (QE), following a similar programme in the UK is, in our view, a positive for markets. It may not be a âsilver bulletâ, but it is a clear additional step in a number of fairly aggressive policy actions taken by UK/US authorities. What may be equally important for markets is the demonstration (yet again) that the monetary authorities have the ability and willingness to be aggressive and bold with the imagination to match.
... which should help equities by raising risk appetite
In general, QE should help the equity market as,
(1) it helps to ease financial conditions;
(2) because of these easier conditions, it is likely to bring forward any economic recovery;
(3) it should help to reduce interest rates on private sector securities, and
(4), at the margin, it should also increase the relative value and attraction of risky assets.
Yes, there may be some unintended consequences, such as lowering the discount rate for pension funds, thereby raising their liabilities. But we doubt this will trigger widespread equity selling.
However, more progress is required on the fundamentals
While QE is helpful, there is not yet enough progress on our other preconditions for a sustained recovery to be confident that current rally can last. Valuations look attractive to us (assuming, as we do, that we do not enter a prolonged period of deflation), but we see this as a necessary but not sufficient condition for a recovery. There is not yet enough evidence that global growth is stabilizing, in our view. Our March Advanced GLI headline reading is still extremely negative -4.6% yoy, (although it shows some sign of improvement). Meanwhile, in the credit market, implied risk premia remain elevated and the iTraxx Xover is close to all-time highs. We continue to expect a strong rebound in equities of 30%-50% from the lows, but do not expect this until there is more progress on the fundamentals, perhaps in 2Q/mid year.
The launch of US quantitative easing (QE), following a similar programme in the UK is, in our view, a positive for markets. It may not be a âsilver bulletâ, but it is a clear additional step in a number of fairly aggressive policy actions taken by UK/US authorities. What may be equally important for markets is the demonstration (yet again) that the monetary authorities have the ability and willingness to be aggressive and bold with the imagination to match.
... which should help equities by raising risk appetite
In general, QE should help the equity market as,
(1) it helps to ease financial conditions;
(2) because of these easier conditions, it is likely to bring forward any economic recovery;
(3) it should help to reduce interest rates on private sector securities, and
(4), at the margin, it should also increase the relative value and attraction of risky assets.
Yes, there may be some unintended consequences, such as lowering the discount rate for pension funds, thereby raising their liabilities. But we doubt this will trigger widespread equity selling.
However, more progress is required on the fundamentals
While QE is helpful, there is not yet enough progress on our other preconditions for a sustained recovery to be confident that current rally can last. Valuations look attractive to us (assuming, as we do, that we do not enter a prolonged period of deflation), but we see this as a necessary but not sufficient condition for a recovery. There is not yet enough evidence that global growth is stabilizing, in our view. Our March Advanced GLI headline reading is still extremely negative -4.6% yoy, (although it shows some sign of improvement). Meanwhile, in the credit market, implied risk premia remain elevated and the iTraxx Xover is close to all-time highs. We continue to expect a strong rebound in equities of 30%-50% from the lows, but do not expect this until there is more progress on the fundamentals, perhaps in 2Q/mid year.
4169.00 hit. Normally, I would expect some sort of retracement, but it seems the bulls are out of the gate and some side-lined money is looking for risk...straddle still in play...no futures position yet...let´s see how that overnight gap works out...
Next big upside target 4278.00. 
Quote from ASusilovic:
Next big upside target 4278.00.
this seems waaaaaaayyyyyyy too giddy leading up Geitner's little show and tell. what has been leaked doesn't seem like salvation. i'd be usrprised if we're up here when Timmy opens his yap.*
* i also thought the ES would pull back about 6 points ago (and have the scars to prove it). so, grain of salt...