What will trigger the next leg of EUR/USD decline? Morgan Stanley: What Will Trigger The Next Leg Of EUR Decline? - General

pavaka 2015.03.30 17:35 #11

"Ex-Fed Bernanke: Economy Not Yet Ready to Swallow Rate Hike " -Translation: Economy will Spit Rate Hike...if not persuaded otherwise...

myname 2015.03.31 10:08 #12

When Ben was payed to tell the truth, he told that rates in the US will not be the same as before in his lifetime

FED is filled with hot air - they are just throwing words like sand in our eyes, hoping that nobody will see that they have no idea what are they doing

Destructors Function declaration Structures and unions

name 2015.04.01 07:47 #13

nbtrading:
When Ben was payed to tell the truth, he told that rates in the US will not be the same as before in his lifetime FED is filled with hot air - they are just throwing words like sand in our eyes, hoping that nobody will see that they have no idea what are they doing

Isn't that always like that : CBs are not there to make the little men live better. They are there to do what bosses tell them to do

thenews 2015.04.03 09:54 #14

What Will Trigger The Next Leg Of EUR Decline? – Morgan Stanley

The Easter holiday is a good time to look at the bigger picture of EUR/USD. The team at Morgan Stanley discuss the next leg down?

What will move the pair out of the current range? Here are some answers:

Here is their view :

The EUR/USD rebound after the March FOMC proved limited and short-lived, highlighting the major underlying bearish trend, notes Morgan Stanley.

“EUR weakness has been driven by several factors, such as the ECB’s QE operations and the growing use of EUR as a global funding currency, both for portfolio and business investment,” MS adds.

While these EUR-bearish factors are set to continue, a question that is now being asked by MS clients is what will be the trigger for the next leg of the EUR decline?

“We believe the answer lies with the major global risk factors – the most important for EUR being the developments in Greece,” MS answers.

“Indeed, we note that EUR/USD has recently changed behavior once again, suggesting that it is not just portfolio and funding flows driving the currency. EUR now appears more exposed to global risks factors. We see Greece as the most likely source of renewed risk for EUR, having the potential to accelerate and extend the bearish momentum,” MS argues.

“Given its deteriorating financial position and the lack of agreement with the EU and other official creditors, the risks of a mishap or accident taking Greece closer to the exit from the eurozone have been increasing since mid-March, in our view,” MS adds.

As a result, MS now see an increased risk of EUR/USD bear case scenario – 0.90 for year-end – being achieved. MS’ EUR/USD year-end forecast currently stands at 1.05.

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thenews 2015.04.19 17:42 #15

Central Bankers Next Test Of Omnipotence Maybe Coming

Here we are, just barely into our first earnings season without the incessantly added fuel provided by QE and the markets are stumbling. At times on Friday the indexes were hovering near the possibility of posting 2% losses going into the weekend. In today’s media mindset of “everything is awesome.” That’s near – unthinkable.

Personally I watched for the now requisite headlines to cross the airwaves at any moment announcing “Federal Reserve member _____________________(fill in the blank) says: The Fed. can, may, will, or won’t do this, that, or the other thing. Just remember: it’s not the economy that’s important. It’s us. We decide for the economy – whether it needs us or not. Never forget: We’re all Keynesian’s now so – trust in us.”

Usually without fail this is followed with what now seems mandatory: The unleashing of HFT fueled, algorithmic stop running, hunt and seek programs to wipe out all that red on the screens turning them into a sea of tranquil green by close. But alas not this time. This just seemed a little odd since every other time precisely such a scenario has unfolded. Yet this Friday? (Insert crickets here.)

Earlier during the week we had the release of the FOMC Beige Book. Here once again so as to make sure there was no misunderstandings in any presumed messaging that you may think to understand. Members both voting and non-voting gave conflicting speeches, interviews, or press releases that made sure what ever you thought you knew or understood – you don’t.

I believe this latest policy tool of dueling scenario Fed. speak in the eyes of the Ivory Tower is still being looked upon as “brilliant.” In my estimation it may quite possibly be the only one they have left. The layman’s term for this is “Baffle’m with bullsh*t.” Because if you can’t decide if they are even on the same page – how can you be sure as to what they will do? Let alone what you should.

So you better not sell – you better just buy more. After all JBTFD (just buy the dip) is today’s Fed. speak for “Mission Accomplished.” No Beige, blue, green, or kaleidoscope colored book needed. So why the deafening silence on Friday? Did CNBC™ finally go dark? There could be another reason and if accurate is very disconcerting.

Maybe it’s because all ammo (and there has been no silver bullet more powerful of late than a Central Banker press conference) is being reserved for a much larger crisis looming on the horizon. i.e. Greece and all its tenuous implications calling for an “All hands on printing presses deck, battle stations” response.

Yes, like you I also tire when I hear another analysis of what will, won’t, or might take place when it comes to the now oversubscribed moniker of a Grexit. Nonetheless, this rolling drama that has taken on attributes worthy of gaining its own syndication for a reality TV show is in its final stages with implications far more reaching than the markets are currently prepared for.

Experts can jawbone ad nauseam how any event is small in “relativity” and sound correct. Yet, have that small event happen at the wrong time when no one’s prepared? And inconvenience can turn into catastrophe in a nanosecond. And it doesn’t take a rocket scientist to conclude after looking at any so-called “fear gauge” within the markets: This market is not prepared in the least. What’s possibly far more scarier? It appears: unconcerned.

To use the “reality show” thesis for an analogy: This is either going to end in another season ending episode (as in – to be continued.) Or, a series ending finality (as in “That’s all folks!”) If it’s the latter; contagion has the aspect of taking down the whole network (e.g., the EU) And that reality isn’t based in some scripted “reality show.” That script is quite possibly – all too real. And the bankers know it.

Over in Europe the banks are huffing and puffing believing they have the upper hand. The banks and bankers (such as Germany’s Mr. Schäuble) continually jawbone implied threats or repercussions unless Greece does X, Y, or Z according to their implicit mandates.

Yet, if one steps back and looks at the bigger picture (i.e., How Greece along with all the other distressed entities will be watching): Exactly what is the all too visible response Mr. Schäuble and his likes within the ECB are going to do as to fix the now failing (again) of their own previously failed bank? e.g., Hype Alpe Andria/Heta Asset Resolution and its calamitous effects to the likes of Duesseldorfer Hypthekenbank AG. Along with the other billions of €uro exposure to Heta that the German Bundesbank recently commented was at risk to other German banks?

Here you have a scenario playing out in my opinion just made for television. The EC, The ECB, the IMF, (aka The Troika) playing hardball calling for this, that, and the other thing while being vocalized by Mr. Schäuble harkening tones of the famous SNL skit “No soup for you!” unless exacting conditions are met, forming what can only be looked upon by the Greek government and people (whether it’s accurate or not) as – bold face hypocrisy.

Think about it: (using generalized examples for a construct) A previously rescued bank turned into a “bad bank,” once again goes belly up, needing to be rescued again for not doing what it should have done, both during, and after, its first rescue. Sound familiar?

This in turn is putting other German banks at risk and causing the ECB itself to call for more “detailed exposure information” from the effected parties. But (and it’s a very big but) the implied willingness for the EU, ECB, or IMF to jump in with its own version of “what ever it takes” while simultaneously demanding Greece to pay up, and shut up? Add to this the perplexing quandary this leaves in not just Greece; but other EU countries when reports are the ECB is having a hard time placing all its newly printed €60 billion monthly QE program. i.e., Need help spending all that money? Why aren’t you spending here with us?

Remember, all this is made possible by money printed ex nihilo to keep everyone (i.e., those chosen to be worthy within the EZ) content and happy. All the while Greece is bludgeoned into submitting to sell, raid, pilfer, what ever it takes of its hard assets to be loaned “money” made via a keystroke to pay back money – that was also generated via – a keystroke.

Yes, I understand how money and such works in the economy of today. Regardless of any of that, is the fact; no matter how one thinks or believes, or, has been taught what should and shouldn’t take place. (i.e., what you’ll be taught as gospel in the Ivy League business schools only to find out in the real world its meaningless if not outright foolish) People, businesses, countries, and more (especially desperate one’s) will do things almost cavalierly what others will contemplate or regard as unthinkable when backed into a corner.

With the above all too real example made prevalent by the Central Banks around the globe. What they’ve created is a premise, that will be exploited, in which monetary moral authority coming from a Central Bank is no longer contemplated within the constructs of debt policy. (regardless if it was sound or not to begin with) i.e., If today a Central Bank can print whatever money it wants via a keystroke out of thin air – then why can’t it print whatever I need? It’s not tied to anything more than – a decision. And the realization of this premise is gaining ground and rushing towards critical mass to any (and all) party feeling financially “oppressed.” Regardless if brought to bear by their own actions or inaction.

So all arguments as to why this, that, or the other thing are irrelevant. For it’s proven ipso facto: if you can save this or that entity via a keystroke – why not us? If I were Greece along with the next inline country to implode financially within the EU – that would be my never-ending argument of defense. Rightly, or wrongly.

Once this Pandora’s Box is opened publicly (as in an accusatory declaration of fact by one party to another) there’s no turning back. And, if you’ve been paying attention to the increasing conflicting reports coming out of the invested parties; there’s anything but an atmosphere of conciliation let alone respect for the other.

All “weapons” are on the table – by both sides. Just who’ll blink is the only unknown. Because no matter which one does – chaos will follow. The only response from the central banks will be in what measured degrees are needed (as well as will work) to deal with it.

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name 2015.04.20 10:04 #16

Central bankers are already behaving like gods - nothing will change that

thenews 2015.04.24 19:18 #17

No Greek Deal, So Why Did EUR Rally?

Why Did EURO Rally With No Greek Deal?

Most investors may be surprised that the euro extended its gains against the U.S. dollar on Friday despite the lack of progress at the latest Eurozone Finance Ministers meeting. However taking a step back and looking at how all of the major currencies traded at the end of the week, we can see that broad-based weakness in the USD played a major role in the EUR/USD's recovery. The Federal Reserve meets next week and another round of softer data has investors worried that the central bank will grow more dovish. Not only have we seen the dollar extend its losses against all major currencies, but Treasury yields have also moved lower. While EUR/USD's reaction to the EZ meeting was unexpected, the outcome was not. According to the Wall Street Journal, it was an incredibly frustrating meeting where Greek Finance Minister Varoufakis was accused of wasting everyone's time. Greece will remain in the headlines as the focus now shifts to the Eurogroup meeting on May 11. And that meeting will take place just 24 hours before the country is scheduled to make a massive EUR780 million payment to the International Monetary Fund. Greece plans to raise funds by forcing state entities to lend to the government but chances are they will miss the payment, forcing the IMF to grant an extension. Even if Greece manages to make the payment, there's a lot of money due to the IMF and ECB over the next few months. In other words, Greece faces many hurdles in the coming months that can pose an ongoing risk for euro. Aside from U.S. dollar weakness, stronger German business confidence also contributed to the EUR/USD's rally, but next week the currency's flows will most likely be driven by the market's appetite for U.S. dollars.

USD: Why the April FOMC Meeting Could be a Big Deal

Weaker economic data drove the U.S. dollar off its highs this month and the big question before us is whether these softer reports will lead to a more dovish FOMC statement next week. Between a slowdown in manufacturing and service-sector activity along with the weakest pace of non-farm payrolls growth since December 2013, there's no doubt that the recovery lost momentum over the past month. Friday's durable goods report only reinforces recent vulnerabilities. While orders rose 4% in March, the increase was driven entirely by transportation with defense aircraft orders rising 112%. If these were excluded, durable goods orders dropped 0.2%. Core capital goods orders fell by the largest amount since December 2012. The reaction in the dollar would not have been so negative if the February numbers were not revised sharply lower as well. The U.S. is not an export-dependent economy but the strong dollar is clearly having an impact on manufacturing activity. Although the Federal Reserve is not expected to change monetary policy next week -- there's no press conference from Janet Yellen -- dollar bulls fear a more dovish FOMC statement. Policymakers have been split on a June rate hike and this month's reports should encourage more members of the central bank to vote in favor of a September liftoff. If that sentiment makes its way into the FOMC statement, the dollar could extend its slide quickly. However we believe there's no benefit to pre-warning of a move in June or September because there's still 2 months before the June meeting. Based on the consistent calls for a rate hike this year by U.S. policymakers, there's still a good subset favoring an earlier move. Yet considering that some market participants had hoped the central bank would pre-announce a June tightening, the dollar could still slip after the FOMC meeting unless the statement is unambiguously positive.

The Fed is heading for another catastrophe - page 2