Posts by "speculator"

pull back on equities resulted in flight to us dollar safety.

tight range between 1.39/1.41
autumn/fall to winter will go down not because of risk aversion but speculation that US will come out of the first part of the recession earlier than Eurozone.

ashraf.

i am in the process of looking into this.

will update once i have come up with a plan.

I think majors will trade tightly during the summer as vix is unlikely to rise and stocks likely to hold on to recent gains until fall. from there onwards we can expect dollar and euro to gain from equity pull backs as interest rate climate tightens. I would target september for bigger moves in the majors and to the benefit of the dollar. we are in a very long W recession and I do not believe we will get a W like great depression as monetary system and banking is so much more different now.

The US government bond market is the key market to watch outfor. future interest rates and inflation will dominate investment decisions and pyschology going forward.

the market remains highly uncertain going forward but it is logical to discount panic equity selling in near term.

The reason why this recession will be long is that as soon as housing picks up in uk/us interest rates should rise sharply and this will cause the downards pressure on house prices again. so markets are enjoying interest rate subsidies by the central banks for now. but i expect over the next couple of years mortgage rates to rise sharply which will severely lessen the likelyhood of a sustained recovery.

mo yes i would for a quick move higher but upside limited.

the markets seem to be more confusing now than ever. but what i am sensing from quite a lot of sources is that risk aversion is likely to come about again. However, panic selling can probably be ruled out now as governments will back up the banks. the next fundamental weighing in on equities will be bond market shocks. dollar libor rates are rising which could lead to higher interest rate expectations and curb stock advances.

As we saw today, sterling benefited from house price positiveness and this fundamental will continue to heavily influence sterling's trend. Therefore if you believe house prices will reverse its recent trend and decline at a somewhat greater and/or longer way, then bet against the pound vs dollar for a longer term trade.

the question is will get a V, L, W or WL recession. seems like markets are pricing in a V.