Waiting for Bernanke with bated breath

By GG Analyst in Reviews 0 Comment

EUR/USD

The market has again come to a standstill and to be on the safe side locked in profits after 8 days of growth. Today Bernanke gives another speech and expectations of this event are given extensive coverage in the press. First of all, it is caused by broad market movements in the opposite directions after the previous two speeches (the press-conference after the FOMC’s decision and the speech given in Cambridge on the occasion of the Fed’s centenary). But that is not all – it turned out that Bernanke’s speeches to the lawmakers usually provoke stronger fluctuations in the market than more…

USD corrects to the downside

By GG Analyst in Reviews 0 Comment

EUR/USD

The single currency came under pressure yesterday evening on the words of  Jörg Asmussen that the ECB’s intention to “keep the rates at or below the current levels for an extended period of time”  goes beyond  a 12-month horizon. Officially the CB has announced that these words shouldn’t be treated as precise directions. However, we, like the majority of market players, have become firm in our suppositions. For example, when the Fed started to use the same phrase, the period of time to keep the rates low went beyond a 12-month limit (actually, by now it’s been already more than two more…

The Fed tries to adjust market expectations

By GG Analyst in Reviews 0 Comment

EUR/USD

FOMC’s officials claim now that the markets misinterpreted Bernanke’s words at the press-conference a week ago. Yesterday Lockhart (doesn’t vote this year) said that market participants misunderstood the intention of the Fed’s head and that he would be watching closely the negative consequences for the debt market. Besides, William Dudley noted that the market reaction goes counter to the Fed’s statements and expectations of the majority of FOMC’s members.  Powell spoke in much the same vein. The massive pressure from these four officials eventually has produced its effect. Government bond yields have slightly decreased in comparison with the trend observed for more…

Don’t scold Japan for no reason

By GG Analyst in Reviews 0 Comment

EUR/USD

The dollar has been falling intensely for the recent three weeks, and the last two ones were especially active in this regard. The main reason for that disfavour towards the dollar was seen in a stream of poor news releases, which forced the markets to reconsider the date to start the stimulus rollback. We expected (and continue to expect) that weakening of the dollar will be limited as the major rivals of the US currency (EUR, JPY, GBP) are now having bigger troubles with their economies and their CBs are much farther from  starting the policy toughening cycle. Anyway, in the more…

Bernanke: a dove with a hawkish beak

By GG Analyst in Reviews 0 Comment

EUR/USD

Bernanke and FOMC’s meeting minutes arranged a roller coaster attraction for the markets yesterday. Since the speech of the Fed’s head to the Congress was the main event of the day, before it the markets had been quiet, gradually selling the dollar and purchasing income assets (now probably only stocks belong here). The US currency started falling more intensely when Bernanke mentioned that if the stimulus was curtailed too soon, it might hamper the labour market. The stock market hit new highs and EURUSD shot up to 1.30. However, it failed to consolidate there as then followed an avalanche of selling, more…