IIFT Daily Note with Peter Brown

FOMC to dominate today

Posted by:  |  Time: 7:31 am  |  Topic:  |  Comments: 2
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Minutes from the FOMC will be released at 7 pm today. Will we get a hint at tapering or indeed any detail. The market which is extremely thin due to holidays will be very active on the news. Any tapering will be slow and the importance the market is attaching to it is overdone. The US economy is too weak to remove QE completely so the sooner we move to detail rather than speculation the better. However the market has got itself in a tizzy about this so the volatility will be big.

Elsewhere the 10 year bond rate is giving us clues as to daily market conditions. Currently at 2.80%. Traders need to keep any eye on this rate for daily mood.

Euro broke thought 1.3400 yesterday. A major resistance level and may signify further gains.

Euro stocks and especially Spain took a beating again yesterday. On stocks we got a bounce but it may be a quiet day ahead of 7pm.

Levels are S&P 1656  1652  1641  Euro  1.3400  1.3485

2 Comments

Herbie

August 21, 2013

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When one looks at EUR/USD and GBP/USD for 15 and 16 August, does it point to pure Dolar strenth / weakness because USD was performing the same against both currencies? or need one use another currency to confirm this, and if so, which will be a good one?

Peter Brown

August 22, 2013

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Hi Herbie,

If the story is the dollar they will be correlated. If the story is the Euro or GBo they won’t.
Remember GBP is a currency that is virtually impossible to trade profitably over time

peter