IIFT Daily Note with Peter Brown

Tapering back on the table!

Posted by:  |  Time: 7:46 am  |  Topic:
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We are back to the ‘will we won’t we scenario’. Fed minutes hint at tapering and the market takes a bath. We now have the possibility of tapering in December. Volatility is back and here to stay until the first cut in stimulus happens. Add to that comments that the ECB may go to negative ineterest rates and we got the full set of moves yesterday, FX, Gold and equities.

Now the market is going to be nervous on the buying side and stocks are now a sell on rallies. Dollar will be strong and the Euro is back under pressure. We may settle into a medium term trend here, selling equities and buying dollars. USD/JPY being a big beneficiary too.

Go with the flow today but look to get short Euro and stocks.

Levels are Euro 1.3470  1.3380 Trend is lower.  DOW (DFB) 15945  15860  S&P (DEC) 1784  1774

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