The Ben bomb

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I thought that the taper crowd and dollar bulls would come unstuck last night but wasn’t expecting those moves.

Eamonn nailed the summary Bernanke – what was so dovish about his Q&A?

I sat through the Q&A and afterwards thought that would be it for the night. I then got pasted for 200 pips selling 1.50 and 1.30 :-D

I did manage to grab USD/JPY at 98.25 and added to my EUR/GBP shorts at 0.8675.

I think the immediate retreat from 1.32 and near 1.5200 showed that the market was using the lack of liquidity to have some fun and I wouldn’t be surprised to see us back down near pre-Ben levels come the end of the day.

The market is a long way from burying the taper bone it’s got in it’s teeth and Bens comments will probably only be a short term set back to that. Any good US data will have the taper bugs jumping in again.

Author: Ryan Littlestone

Ryan Littlestone has been working in financial markets for more than 20 years. Wide-eyed, he stepped out of Bank station in London to join LME founding member Rudolf Wolff where he worked his way to the main order desk and brokered customer orders to the LME floor and across virtually every global market. An opportunity to help set up and run a new LIFFE floor operation saw him catch the trading bug and it wasn’t long before the pull of the pits was too great to refuse. He became a ‘local’ and has been trading his own account for more than 11 years.

16 Comments

  1. Your not the only one who got taken out to the woodshed last night.

  2. Hi Ryan, Great job in picking those levels post Bernanke confusion! What is your target for your eurgbp shorts may I ask? I got my bid at 0.867 filled so am looking to t/p at around 0.86? What do you think? Thanks!

  3. Hey Ryan, yup it was tough holding cable shorts last night. I’m always very wary of moves during low liquidity and will be holding onto my shorts for now…

  4. i dont think that this happened due to thin liquidity . it was a market trick to get as many short position like if big player want to go up they need maximum short position and today its also happening the same it coming un expected ly down to get short positon finally it will go up may be above yesterday level.

  5. Hope you mean you got your offer filled Tim? ;-)
    I’m going to see how it plays out but may take some off at 0.8600. I’m happy to hold on while the UK data is still showing positive in the main

  6. Bernanke is scared to death that there is an imminent financial crisis brewing (September 2013?) and that he has lost control. His comments about inflation and jobs is nothing more than political cover for his actions that are essentially under-the-cover bank bailouts since direct bailouts are now politically impossible. Tick Tock Tick Tock.

  7. Not solely Gorro but that was a factor. If there was any conviction to the moves we’d still be up there.

  8. Well,, we did get close to the 2013 low yesterday, so not surprised on move back up, but that late day rally did seem pretty crazy. Then that rally last night was just over the top My game is pretty short term, so seldom like to trade after London close. I thought that Euro might move on Helicopter Ben’s remarks, but possibly back down, Think ole Pres Barack thought he might be sounding a little too hawkish and suggested he try to cool the taper remarks. Be pretty hard to finance deficit spending if interest rates get too high! So you think taper is in. Not so sure myself, Way too much unemployment and too many have dropped out of job market. Manufacturing is coming back to US, but not fast enough and what does requires a different skill set.

  9. What is your target for long dollar/yen?

  10. Ryan. What is your target for long dollar/yen?

  11. To be honest Lulu I haven’t thought that far ahead. I’ll see how the states play out early doors, then decide whether to hold or bail.

  12. I strongly disagree with your view. I think the Fed Q&A was a clear game changer. The dollar bubble burst and I expect to see dollar selling over the next couple days. Basically Ben put an end to the taper speculation, he made that crystal clear, even should unemployment numbers touch or breach 6.5%.

    I would not be surprised to see USDJPY trading down to 95 over the next couple days/weeks though I believe many of the moves will also go directly through the dollar crosses such as EUR and Cable. I am not looking to touch AUD yet from the long side so I excluded that.

    I also think there is more room to the upside in EUR/AUD and GBP/AUD.

  13. …my rational to potentially consider the dollar crosses on the long side vs short yen crosses is that continuing QE will continue to benefit equity markets which may keep a lid on larger moves down in the yen crosses.

    Thus, EUR and Cable may continue to benefit once funds start liquidating their long dollar positions…

  14. Haha yes Ryan. It’s offer. Look what Ben’s confusion did to me! Ha! Anyway the trade’s looking good yea? Am thinking of closing out around 0.86 to have a good nite’s sleep!

  15. startin from today i’m gonna call uncle Ben Bomber Ben/ Bomber Bernanke/ Ben the Bomber/ Ben ‘Bomber’ Bernanke…… anything else?

  16. Nothing I can put in print Figues ;-)

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