5 hours ago | August 22nd, 2014 16:10:02 GMT

US unemployment doesn’t tell the whole story says Fed’s Lockhart

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  • Is a little more cautious on growth than FOMC
  • Not so concerned we’re going to see a rapid gain in inflation
  • Wants to see a few more months of good data
  • Says if we see very strong data the first rate hike could move forward

The Fed mob are earning their corn today doing the new channel rounds as Dennis does CNBC

The market is all central banked out right now though and there’s no effect on the dollar. US 10 year yields have fallen further to 2.41% and although off the highs, the shorter end are holding up better.

0 comments

5 hours ago | August 22nd, 2014 16:02:54 GMT

Fed’s Williams says unemployment is still too high

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  • Doesn’t see risk of inflation overshoot
  • Says very accommodative policy is what’s needed
  • Says FOMC sees gradual rises in interest rates
  • Timing of rises depends on the data
  • Expects rise to occur near mid-2015

It had been so lovely and peaceful with all the jawboners on their jollies but they’ve all come back to work on the same day :-)

Speaking on BBG this time and was on Fox earlier

San Fran Fed’s John Williams is on the FOMC subs bench this term

1 Comment

5 hours ago | August 22nd, 2014 15:55:35 GMT

European stocks finish down as weekend worries come into play once again

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  • FTSE flat –  +1.29% week
  • Cac -1.2% -  +1.89% wk
  • Dax -0.7% - +2.71% wk
  • Ibex -0.7%+2.77% wk
  • FTSE Mib -0.5% - +2.24% wk

European bonds

  • Italy 2.58% -2bp
  • Spain 2.38% -2bp
  • Portugal 3.24% +2bp
  • Germany 0.983% -1bp

Hard to get a real grasp on the close with all that’s gone on today. There’s been no expectation in European markets to Draghi pulling a rabbit out of the hat but the threat is there. Surely he’s got to be better than Yellen, no?

 

1 Comment

6 hours ago | August 22nd, 2014 15:29:46 GMT

Euro suffering as the dollar takes off

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In relative terms the pound is holding up fairly well but the euro looks to be in heaps of trouble.

We’ve hit the 61.8 level of the July 2013 fib having hit a low at 1.3221. That’s below the 1.3226 I have as the fib but 5 pips between different brokers and spreads is small enough that it’s a hold of the level.

EUR/USD Daily chart 22 08 2014

EUR/USD Daily chart 22 08 2014

The euro can’t buy a bounce for love nor money so it needs all the help it can get. If we do break the 1.3220 level then 1.3200 then we could be in a whole world of pain.

As I type it’s putting in a spirited comeback and is trading 19 pips above the lows.

USD/JPY looks like it’s running out of steam and that could be from profit taking by Europe into the weekend. The bulls will want to see a close above 104.00 tonight.

8 Comments

6 hours ago | August 22nd, 2014 15:07:23 GMT

NATO’s Rasmussen says there is an alarming build up of Russian ground and air forces in the vicinity of Ukraine

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  • Instead of de-escalating situation, Russia continues to escalate it
  • This can only lead to Russia’s further isolation

It’s also being reported by LiveSquawk that Putin had a conversation with Merkel and said that the aid convoy couldn’t wait any longer.

Reuters now carrying the headlines;

  • Putin tells MErkel That Russia could no longer wait so decided to send humanitarian convoy into Ukraine
  • Putin expresses serious concern over military escalation in Eastern Ukraine
  • Discusses with Merkel steps their countries could take to help achieve ceasefire in Ukraine as soon as possible

Yellen is being trumped by this latest news moderately, but US yields have fallen back to 2.42% and the dollar run is halted for the moment.

 

3 Comments

6 hours ago | August 22nd, 2014 14:47:35 GMT

Traders seeing some reasons to buy the buck after chewing through Yellens speech

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Having gone over it briefly the main jist I get is that she and the Fed are watching for reasons that will see the jobs market accelerate. While she goes through the cyclical vs structural reasons it makes a case for understating the level of slack and the possible effects if slack falls.

“Of these, greater worker discouragement is most directly the result of a weak labor market, so we could reasonably expect further increases in labor demand to pull a sizable share of discouraged workers back into the workforce. Indeed, the flattening out of the labor force participation rate since late last year could partly reflect discouraged workers rejoining the labor force in response to the significant improvements that we have seen in labor market conditions. If so, the cyclical shortfall in labor force participation may have diminished.”

“A second factor bearing on estimates of labor market slack is the elevated number of workers who are employed part time but desire full-time work (those classified as “part time for economic reasons”). At nearly 5 percent of the labor force, the number of such workers is notably larger, relative to the unemployment rate, than has been typical historically, providing another reason why the current level of the unemployment rate may understate the amount of remaining slack in the labor market.”

It brings a positive note that employment will continue to gain and perhaps at a much stronger pace going forward. This had got trdaers going gung-ho for the buck now and bonds are joining in. US 10′s yield 2.43% having been up to 2.44%

USD/JPY has busted through 104 to 104.19 and the eur has been crunched back to 1.3228

USD/JPY Daily chart 22 08 2014

USD/JPY Daily chart 22 08 2014

We’ve broken above the April highs now and that virtually gives the green light to a bigger run up towards 105

3 Comments

7 hours ago | August 22nd, 2014 14:16:17 GMT

Yellen plays it straight down the middle in Jackson Hole speech

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If you wanted her to lean either way then you’ll be disappointed as she’s maintained her usual slant, modestly dovish but no movement on the scale.

The market has taken the lack of even more dovishness as a small hawkish signal, go figure.

We’re in no different a position that 15 minutes ago but it’s what the market wants to do with it that matters.

At the moment it’s deciding that they don’t need this latest Janet Yellen speech to go off on the rate rise hunt.

USD/JPY has broken through 104 but has fallen back below. Watch for a fight at this level.

EUR/USD has broken through 1.3250 to 1.3238 from 1.3265, not exactly crumbling.

Everywhere else it’s small moves and “as you were”

As far as dropping tape bombs, Bernanke or Draghi she ain’t

Going forward over the next few minutes look for signs that the market is disappointed with the comments as that will drive the dollar lower. Failing that we could be in for a relatively strong close.

12 Comments

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