The ever-present headline risk from Europe is compounded by uncertainty about what Fitch will do in the week ahead.
In August Fitch said a supercommittee failure would likely result in a “negative rating action” which is most likely a negative outlook, but could be an outright downgrade (a negative outlook indicates a greater than 50% chance of a downgrade within 2 years.)
We have heard from S&P and Moody’s. Fitch said it will conclude a review of the US rating by the end of the month.
The US is on holiday Thursday and Friday is treated like a holiday so that leaves tomorrow, which would be helpful in bringing the discussion to Thanksgiving dinners. More likely is Mon, Tues or Wed next week. My guess is Monday, the time is likely around the US close. It may be worth punting on USD/JPY shorts around that time..
