IIFT Daily Note with Peter Brown

Draghi Disapoints, Stocks rally.

Posted by:  |  Time: 7:38 am  |  Topic:
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Firstly Draghi had his German hat on yesterday and resisted any stimulus measures for the Euro Zone. No real surprise there as a further cut in interest rates would have little effect and more LTRO is not yet on the agenda. Looks like the stats in Europe will have to deteriorate further for the ECB to act. Euro took a bounce, this currency is teflon and is now back into familiar range.

Stock on the other hand had a really good bounce. Today we have the NFP. 185k is expected but given last months 74k surprise we could get any number today. Good number (190+) should lead to a bounce of 100 points a bad number (lower than 170+) should lead to a 100+ sell off. The taper argument is not relevant I feel. We will taper anyhow and the market has accepted that.

Conditions are likely to be Calm this morning and possibly Choppy/Hurricane this afternoon.

Levels today are Euro 1.3620  1.3540  S&P (MAR) 1786  1760 Wall St (FDB) 15750  15560

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