looking at the spike on euro (and then the momentum selloff on bonds), it looks like Paulson's rhetoric *actually* affected the market. the timing coincided with statemnts on the dollar and China today, at least with my newsfeed. particularly surprising how he strengthened the dollar. perhaps after a jobs report not showing too much weakness, the rhetoric has effect. any opinions? so any ideas guys - is this the inevitable selloff to consolidate for another leg up on the eurusd, jpyusd, and 10/30 yr bond ?
so many mixed market moves today it's hard to make heads or tails. when the jobs # came out, eurotraded UP hit mid 1.33 area. only to sell off a penny later. bond did the opposite, then immediately recovered to above pre trading prices, then sold off. took a while for the two to synchronize - ultimately paulson's talk on cnbc is what i think did it. If I had to put money on it (which I am), I'd say the market's inconsistent reaction to these #s would say the current trend is still in place. Its not as if unemployment was further down and we had 500k new jobs. we're only talking about 30k away from expectations; add to that declining consumer confidence ... its not exactly an argument for the markets to start anticipating continued raise of rates. the fed will likely do nothing over the next 6 months...
fed meets tuesday, no change in rates... the statement will be the same one they have been using for the last 5-6 months. Inflation remains a concern, etc etc etc etc etc...
My guess is that the initial reaction to nonfarm was bullish for the dollar, since rates are not going to be cut. And then buy the EUR dip players came in but failed to make a new high. So they all got out -- Paulson was the excuse.
I hear ya. As far as USD/JPY goes I've been wanting to get long on it for awhile. Too bad I didn't buy this morning. Either way the recent run-up indicates some strength to me. The Yen has also been weak, so I think it's a safer bet than EUR/USD or GBP. Have a good weekend, I'm out.
paulson is talking out his ass why would china devalue its currency vs the usd?? to destroy its export market? to devalue further its trillionesque mountain of u.s. poo? paulson suggested they would do this to become " a more dominant strength in the world market" cough cough.. who is running surpluses? who has citizens that save some of their money? who is growing at 10+% a year?? they have and will continue to allow a little yuan strength to appease the us and appear concilliatory so they don;t get sanctions slapped on... paulsons a slick dude though - i give hime that. very sharp guy. and that was one of the only smart things i have seen bush do is get that guy on the bus - ill give that to him... gotta go - time for the 3.30 u.s upward market manipulation...