********************************
store to read remotely.
read again to understand: research a bit.
http://www.zerohedge.com/news/2012-09-23/fed-has-another-39-trillion-qe-go-least
6 day rally in bonds and dollar(UUP). Everything in mild risk off correlation. Failed breakout in gold 2 days ago.
QE euphoria over for now? GLD ma(5) of corr with SPY very strong (+) when risk on. ma(5) corr (-) recently when risk off with
GLD PA stronger (excluding today) AVG day % change(20) = .61% vs. .42% SPY. Looking to do (1GC-2*ES).Wait. SPY looks stronger tonight. Approx 50k(20k due to volatility)
GLD exposure IF corr holds. Spread is up about 7% in 30 days. More bullish on GLD than SPY but seems OIL and GOLD hard assets
not encouraged by FED, GOV etc.. inflationary. Margin increase on gold deadly . Look into silver vs. gold spreads.
GLD SPY very strong risk on recently. Could use GLD and SDS etf to do the same thing smaller size lower risk no overnight liquidity.
TLT 122.50 0.78%
FXY 126.12 0.36%
TLH 135.29 0.34%
UUP 21.80 0.23%
SPY 145.65 -0.15%
FXA 104.38 -0.28%
FXE 128.43 -0.48%
GLD 171.05 -0.53%
USO 34.09 -1.16%
VXX 8.57 -1.49%
SLV 32.93 -1.64%
Snippets from Marc Chandler on seekingalpha.com: Good summary of events in news.
The U.S. dollar is firm to start the new week, except against the Japanese yen, amid a general risk-off tone.
The U.S. dollar is firm to start the new week, except against the Japanese yen, amid a general risk-off tone.
The fifth consecutive decline in the German IFO .
Talk that the ESM can be leveraged through selling bonds to the private sector is not helping peripheral European bond markets
It is generally assumed now that when Operation Twist is complete at the end of the year, the Fed will replace the bond buying by extending QE+. The Fed's balance sheet will expand by roughly $1 trillion.
The ECB plans to sterilize the purchases it makes under the Outright Market Transaction program and unless there is another LTRO, the ECB's balance sheet is unlikely to expand very much.
European developments may overshadow central bank balance sheets in the days ahead. There are several developments/events to monitor in Europe.
* In Portugal, the recent public protests have the government looking for an alternative to the planned hike in the social security tax from 11% to 18%.
It has already been given another year to meet the fiscal target, but European officials still have not acknowledged what this means.
It is unlikely that it will be able to return to the capital markets in nine months like it is expected to under the 78 billion euro aid package.
Spain will release broad strokes of next year's budget. It will also announce a package of structural reforms that are meant to anticipate
the conditionality that may be required if it asks for assistance. Among the measures discussed are freezing pensions, accelerating the plan
increase in the retirement age, and lowering the threshold of the wealth tax.
The results of the bottom-up analysis of Spanish banks is expected to be released at the end of the week.
They will be compared with the early estimates of around 60 billion euros, which at the time was met with great skepticism on the part of investors.
Since then, the bad loan ratios have increased and deposits have fallen.
There is some talk that Spain could use the remainder of the 100 billion euro backstop for other purposes (like supporting its own bond market), beside bank recapitalization, but this seems highly unlikely.
Some observers expect Moody's to conclude its rating review by the end of the month, though there is not fixed date. Moody's gives Spain the lowest of its investment grade ratings.
We(Chandler) suspect there would be strong market reaction if Spain were to lose its investment grade status.
Finally, we note that the region of Catalonia is seeking formal guidance from Brussels on the legality of secession from Spain.
Germany seems to be quite nonchalant about developments; displaying no sense of urgency.
It does not want the ECB rushed into the bank supervisory role. Although some in the EU are pushing for a resolution on Greece at the heads of state summit
in the middle of next month, Germany seems content to wait until November, which some reports link to the aftermath of the U.S. presidential election.
The IMF is also taking a very strong stance on Greece, perhaps in order to drive home its point that another debt restructuring is needed (official sector, including the IMF, has 2/3 of Greece's debt).
France and Italy reportedly were encouraging Spain to request aid soon, but Germany's Finance Minister was unequivocal. He had "unshakable conviction" that Spain does not need additional aid.
This perhaps foreshadows the difficulty it would be now to get German parliamentary support.
store to read remotely.
read again to understand: research a bit.
http://www.zerohedge.com/news/2012-09-23/fed-has-another-39-trillion-qe-go-least
6 day rally in bonds and dollar(UUP). Everything in mild risk off correlation. Failed breakout in gold 2 days ago.
QE euphoria over for now? GLD ma(5) of corr with SPY very strong (+) when risk on. ma(5) corr (-) recently when risk off with
GLD PA stronger (excluding today) AVG day % change(20) = .61% vs. .42% SPY. Looking to do (1GC-2*ES).Wait. SPY looks stronger tonight. Approx 50k(20k due to volatility)
GLD exposure IF corr holds. Spread is up about 7% in 30 days. More bullish on GLD than SPY but seems OIL and GOLD hard assets
not encouraged by FED, GOV etc.. inflationary. Margin increase on gold deadly . Look into silver vs. gold spreads.
GLD SPY very strong risk on recently. Could use GLD and SDS etf to do the same thing smaller size lower risk no overnight liquidity.
TLT 122.50 0.78%
FXY 126.12 0.36%
TLH 135.29 0.34%
UUP 21.80 0.23%
SPY 145.65 -0.15%
FXA 104.38 -0.28%
FXE 128.43 -0.48%
GLD 171.05 -0.53%
USO 34.09 -1.16%
VXX 8.57 -1.49%
SLV 32.93 -1.64%
Snippets from Marc Chandler on seekingalpha.com: Good summary of events in news.
The U.S. dollar is firm to start the new week, except against the Japanese yen, amid a general risk-off tone.
The U.S. dollar is firm to start the new week, except against the Japanese yen, amid a general risk-off tone.
The fifth consecutive decline in the German IFO .
Talk that the ESM can be leveraged through selling bonds to the private sector is not helping peripheral European bond markets
It is generally assumed now that when Operation Twist is complete at the end of the year, the Fed will replace the bond buying by extending QE+. The Fed's balance sheet will expand by roughly $1 trillion.
The ECB plans to sterilize the purchases it makes under the Outright Market Transaction program and unless there is another LTRO, the ECB's balance sheet is unlikely to expand very much.
European developments may overshadow central bank balance sheets in the days ahead. There are several developments/events to monitor in Europe.
* In Portugal, the recent public protests have the government looking for an alternative to the planned hike in the social security tax from 11% to 18%.
It has already been given another year to meet the fiscal target, but European officials still have not acknowledged what this means.
It is unlikely that it will be able to return to the capital markets in nine months like it is expected to under the 78 billion euro aid package.
Spain will release broad strokes of next year's budget. It will also announce a package of structural reforms that are meant to anticipate
the conditionality that may be required if it asks for assistance. Among the measures discussed are freezing pensions, accelerating the plan
increase in the retirement age, and lowering the threshold of the wealth tax.
The results of the bottom-up analysis of Spanish banks is expected to be released at the end of the week.
They will be compared with the early estimates of around 60 billion euros, which at the time was met with great skepticism on the part of investors.
Since then, the bad loan ratios have increased and deposits have fallen.
There is some talk that Spain could use the remainder of the 100 billion euro backstop for other purposes (like supporting its own bond market), beside bank recapitalization, but this seems highly unlikely.
Some observers expect Moody's to conclude its rating review by the end of the month, though there is not fixed date. Moody's gives Spain the lowest of its investment grade ratings.
We(Chandler) suspect there would be strong market reaction if Spain were to lose its investment grade status.
Finally, we note that the region of Catalonia is seeking formal guidance from Brussels on the legality of secession from Spain.
Germany seems to be quite nonchalant about developments; displaying no sense of urgency.
It does not want the ECB rushed into the bank supervisory role. Although some in the EU are pushing for a resolution on Greece at the heads of state summit
in the middle of next month, Germany seems content to wait until November, which some reports link to the aftermath of the U.S. presidential election.
The IMF is also taking a very strong stance on Greece, perhaps in order to drive home its point that another debt restructuring is needed (official sector, including the IMF, has 2/3 of Greece's debt).
France and Italy reportedly were encouraging Spain to request aid soon, but Germany's Finance Minister was unequivocal. He had "unshakable conviction" that Spain does not need additional aid.
This perhaps foreshadows the difficulty it would be now to get German parliamentary support.