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by Ashraf Laidi
Posted: Apr 27, 2009 15:55
Comments: 42
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This thread was started in response to the Article:

Rising Yields Fight the Fed

Rising bond yields are further hampering the Fed's policy
 
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Ashraf Laidi
UK
Posted Anonymously
16 years ago
Apr 29, 2009 10:50
ROB, not sure if Fed will annnounce the purchase of more treasuries but like i said, in the event that they do (and bond market is convinced that is enough) then falling yields would drag on the dollar and boost gold. EURUSD, AUDUSD, GBPSUD should be a sharp gainers in this event.

FERNANDO, that's a good point about the euro having risen in the days before the Mar 18 FOMC announcement. The Fed right now is more worried about YIELDS than about the DOLLAR. I see a 70% chance the Fed will announce more purchases of treasuries but the QUESTION is will that be ENOUGH to drag down the dollar and help gold? I am not so sure. I see EURUSD capped at 1.3320 for now.

Stay tuned for more updates

Ashraf
Fernando
London, UK
Posts: 1
16 years ago
Apr 29, 2009 10:10
Hi Ashraf,

Do you think the swine flu is just the perfect excuse at the right time for the FED to keep buying LTs? EURUSD chart is also confirming it by failing to stay below 1.30 after three short dips yesterday and rebounding to 1.31. On the 18th of March, EURUSD broke above 1.30 towards 1.31, and then the FED come and bought LTs. It fells that they will not want to spoil the rally right now, after all, it plays a huge role in consumer sentiment and thereby on the possibility of a recovery. Do you also feel that the FED may buy more and that there might be another spike in EURUSD?


Rob
New York, United States
Posts: 305
16 years ago
Apr 29, 2009 3:37
Hey Ashraf,

I appreciate your latest article and "clarifying the conclusions" in your IMT, I just haven't figured out bonds yet - which pair do you think will move the most on tomorrow's Fed announcement (up or down, unless of course you have an idea already) - EUR/USD, etc. - and will silver follow gold if they announce more purchases? I noticed it broke a little below the 12.6 support, still eyeing 13.85? thanks a lot Ashraf!
Ashraf Laidi
London, UK
Posts: 0
16 years ago
Apr 28, 2009 20:42
Hamish, today's USDCAD daily candle looked bullish. we went as far as 1.2266 from yesterday's 1.2080. Today's rising yield action is quite significant. if we see further run-up after the Fed, then expected USD higher. As for USDCAD, it can also rally from the slightest sign of falling risk appetite. Markets closely watching the number of new Swine cases in the US. 64 so far.

Ashraf
hamish
vancouver, Canada
Posts: 26
16 years ago
Apr 28, 2009 19:21
Hi, I am wondering why you rate usdcad a buy? cad this am dropping like a stone despite 3% t.rates.
Are you betting fomc will not increase their purchases? Or am I confused?
Ashraf Laidi
London, UK
Posts: 0
16 years ago
Apr 28, 2009 17:11
FL, if Fed does not buy treasuries or expand it splanned purchases then bond yields will rise, dollar gains and VIX may extend higher at expense of stocks.

Ashraf
FL
GuangZhou, China
Posts: 14
16 years ago
Apr 28, 2009 11:10
Thanks Ashraf, Usually in situation VIX Is reflects the risk loathing mood the target ?
It and the stock market and US dollar index before has what kind of relational to be able under the simple introduction ?

Francis
Ashraf Laidi
London, UK
Posts: 0
16 years ago
Apr 28, 2009 10:46
FL, my short term target for USDCAD at 1.23, followed by 1.2370.

Here's a free charting site for the VIX...http://stockcharts.com/h-sc/ui?s=$vix&p=D&b=5&g=0&id=0

Ashraf
FL
GuangZhou, China
Posts: 14
16 years ago
Apr 28, 2009 9:34
Hi Ashraf,

how about USD/CAD, 1.2200 Already went and oil under 48.90, Whether can continue to have the multi-lists ? But in Thursday's conference life for FED, You thought that can give US dollar to bring the negative influence including the Stock market. In the short and medium term you saw an item of marked price can be how many. PS: Wants to ask your which software can see to VIX index?

Thanks a lot
Ashraf Laidi
London, UK
Posts: 0
16 years ago
Apr 28, 2009 8:41
Rob, Fundamentals are surely showing slower pace of deterioration but it does not mean that the negative feedback loop from banking and real estate into spending and unemployment will not re-affirm itself again. there's still a lot of unknowns in the banking and auto sector (US and abroad). And this is without the Flu being factored in. Initial SDS target at 85. if you own stocks, it's normal to own SDS, especially during these times (and when stocks are near their highs).

Ashraf
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