$ For The week of 10/23-With Some Trade Ideas
I would like to start off when posting outcomes by making a suggestion for the calender. Take the core PPI for example; the outcome is listed in green, indiing the number was better then anticipated. Being that PPI is an inflation number and that it came out high, I believe they should list it in red as this number is a result. I really do I am sure it requires it to conduct and want to say thanks to whomever runs this whole thing though-FF is a excellent place to discuss ideas.
I have alot of questions about some of the outcomes we've seen this week and the total tone (negative) of this $. The bulls have run out of gasoline and I am not certain why. In my thinking, there certainly were a lot of (inflationary) indiors.
The week began using the Empire Index 2x as good as anticipated. The core PPI has been 3x higher consensus. The TIC report revealed that a vast amount of overseas capitol being spent in US gov't newspaper ($ at the short term, foreigners have to buy $'s to buy the bonds). New jobless claims were down. Most curious to me was the response to this market off the core CPI; although the number was on consensus, it demones that number as being higher then the Fed has stated it needs it to be and also the y/y rate is the highest for several decades. Then from last weeks higher NAHB reading (a shocker even though it's still far below 50), we had the gov't saying that housing starts increased. Bernanke has stated plainly that the Fed is based on a slowing in the building of new houses to slow the economy. . .the only - reports were the Philly Fed along with indiors.
On the other hand, the market is convinced there will not be a US hike next week and this is why we saw gains in the GBP, EUR, AUD and NZD. In GBP,NZD, and AUD particularly, we have markets in which traders are convinced rates will go up at their meetings. So what's going on in the short term is traders getting into these currencies.
The huge thing next week is going to be the tone of the Fed announcement following the rate announcement. The market will be focusing on this. For the life of me I can not see how it will be anything but hawkish. Personally I am preparing to see a 180 from the markets perception about what the Fed is going to be doing next time. Don't Neglect the NFP and the upward revisions. There are a lot of jobs in the economy.
I took a longer term mini postion from the GBP/USD (long) dependent on the markets perception of no increase for the FED plus a increase from the BoE. I am gonna watch this because perception can change. If I am lucky enough that $- sentiment remains until the FOMC, I gonna be from it.
How do you find the announcement? In my thinking, it can not be anything but quite hawkish. Your opinion?