Archive for September 2012

Wall Street’s underlying ‘risk-on’ trend.

Writing in last Friday’s Insight column of the Financial Times, Gillian Tett picked up on the Fed’s latest initiative on QE3 (Beware the high costs and psychology of America’s QE3) and on why several Fed Governors (and non-voting FOMC members) were less than supportive of it. She encouraged those wishing to celebrate the market action…

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Equity markets are overbought but still deserve a re-rating.

Equity markets deserve a re-rating. They have had some of it, but not all of it. That said, they are overbought and due for a bout of consolidation. Looking back on the past few weeks, the ECB has introduced its Outright Monetary Transactions (OMTs) and the European Stability Mechanism (ESM) has been given the all-clear…

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Green light needed for equity markets.

Commenting in this morning’s Financial Times on Mr Weidmann’s decision to vote against the European Central Bank’s Outright Monetary Transactions (OMTs) initiative, Wolfgang Munchau notes that; ‘… the ‘consensus view among German commentators is that the ECB has lost its independence …’. It might be put otherwise. It is not that the ECB has lost…

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Draghi does the trick.

Picking up on our comment yesterday following the ECB’s press conference, the market reaction has been more than gleeful. On Wall Street, the major indices hit new post-financial crisis highs and the FTSE Eurofirst 300 Eurozone Index has now convincingly broken through the resistance shown in the chart on the next page. Both the Spanish…

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Two action packed weeks for markets.

Two big weeks lie ahead for markets, which are likely to set the tone for the coming months. Aside from various central bank meetings (for the eurozone and the UK among them), this week’s economic news includes various purchasing managers’ surveys and culminates with Friday’s US Non-Farm Payrolls, which could set the stage for Fed…

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This week it’s Fed time, next week it’s ECB time.

James Bullard, a non-voting member of the FOMC, called them a ‘bit stale’. He was referring to the Minutes of the Fed’s late July/early August policy meeting released last week. The widely quoted message, delivered in no uncertain terms in the Minutes, was that, unless the news flow ‘pointed to a substantial and sustainable strengthening…

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