IIFT Daily Note with Peter Brown

FOMC minutes

Posted by:  |  Time: 7:38 am  |  Topic:  |  Comments: 4
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Well the much hyped minutes were released. Frankly you can take from them what you will. Some in favour of going soon, some cautious, and all agreed we need to taper at some point. The market reaction was initially positive and then a sharp sell off. The selling was more to do with the overall mood of the market than the minutes itself. Emerging markets worries are probably more responsible for the bad moor. This and a very thin market led to a move greater than the news would warrant.

Today we have PMI figures in Europe and employment in the US, so the volatility is set to continue.

Market is too low I think. I would not be a seller down here. We have a chance at recovering the lost ground to 1650 on the S&P.

Dollar also saw some buying on the back of the news.

Levels this morning are

S&P 1630 support  1640  1650 resistance  Euro back to 1.3320  1.3400

 

4 Comments

Gordon

August 22, 2013

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I suppose the principle still holds that QE will be kicking in sometime soon and by the time it starts in earnest will the market just expect it and look for leads elsewhere ?

Peter Brown

August 22, 2013

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Hi Gordon..
Yes. as you can see from todays price action. It is sell the rumour buy the fact.
The market will get used to the fact the QE will end and then ignore it

Peter

Noel

August 22, 2013

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Hi Peter, I have heard a couple of times today that Solvenia is now entering people’s radar screens and that we should be keeping an eye on it as it could be the next crisis area within the EU. Have you heard anything on this?

Noel

Peter Brown

August 22, 2013

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Hi Noel,

Solvenia is too small a story to impact the markets at the moment.
It’s all about emerging markets and tapering in the US.
Europe is being ignored and in fact a positive for the moment

Peter