Premise check?
- The controversial US toxic asset clean-up plan, aimed at clearing bad loans from US banks’ books to enable them to raise capital and lend freely, has fallen behind schedule, and may never be fully implemented. (FT)
- Ireland’s credit rating was lowered by Standard & Poor’s for the second time in three months on the cost of bailing out the country’s banking industry. (Bloomberg)
- Treasury prices fell, sending yields to their highest levels in seven months as expectations rose that the Fed might increase interest rates sooner than thought. (WSJ)
- South Africa’s rand dropped to the lowest level in more than a week after the central bank indicated it may counter “extreme” movements in the currency following a rally of as much as 20 percent this year. (Bloomberg)
Key Reports (WSJ):
No economic events are scheduled for today.
Quotable
“While payrolls slid by 345,000, much below the consensus guess, it was the usual hokey number, getting a lift from the wonderful birth/death model, which somehow summoned up 220,000 jobs and did so, magically, out of thin air.
“The harsh truth is that, using the regular payroll data, a rather formidable 14.5 million people are out of work. Moreover, if we look at the category we feel gives a more accurate picture -- the so-called U-6 tally -- which includes people too discouraged to keep looking for a job and those working part-time because they can't find full-time slots, the unemployment rate shot up to a new high of 16.4%. That means that something around 25 million folks are effectively on the dole. Ugh!”Alan Abelson, Barron's
FX Trading - Premise check?
Let me throw this out to you currency trading enthusiasts... What if:
- The world will be struggling with deflation instead of inflation?
- US employment and housing experience another leg down?
- China disappoints?
- An Eastern European country defaults?
- The US is on track to at least muddle through better than Europe?
…well, it might mean:
- Commodities prices are “way” overvalued
- Emerging stock markets are “way” overvalued
- Long bonds are “way” undervalued
- The US dollar is “way” undervalued
Is it time for a premise check? We think so.
Related Posts:
- Bad day of the dollar 07:31 24 June 2009
- ECB Policy Still Standing Still, Euro Losing Its Footing 11:19 02 October 2008
- Will Our Hero Engender A Bounce? 12:05 10 October 2008
- Emerging markets soaring...overshoot? 09:29 27 July 2009
- Commodities sentiment near and far: It's all good! 09:16 29 June 2009
Comments (2)
good article and links, thanks
nice article
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