The Fed seem to have made there thoughts clear, that the economy is performing below potential, hence a good reason to keep QE going. This intern brought about further gains in the Stock Market, despite the fact the market rallied hard because of the rumour of this happening in the first place.
The appetite for stocks are so high right now that any sign of weakness gets snapped up. The Nasdaq was down 25 dollars pre open yesterday and finishes the day up 40 dollars, with 4 ticks making up a dollar, that's more then a 240 tick move up pretty much in a straight line, as fund managers chase performance coming to year end. This will lead to buying at any cost, and especially on any pullback.
Today's action paints a similar story, despite weak CISCO numbers, the NASDAQ is almost positive again, and ES making new highs, 12 points away from hitting 1800!! Up too much too fast? It doesn't matter, this bubble is getting bigger like the FEDs balance sheet, and it doesn't look like QE is going to go away anytime soon.
As far as Bonds are concerned, as you would expect Spreads have been shifting lower, as Yellen says QE is the best course of action at the present moment. We are trading 4.5s again in Dec14Mar15, after going to 6s a couple of days earlier, this presents a good buying opportunity again, enough for 1/2 tick at least.
On the UK front, slightly weaker retail sales pushed Short Sterling higher, after an initial downward spike on the higher estimates for GDP from Mark Carney in the UK inflation report. However the Spreads are pushing down along with Euribor and Eurodollar, although if one Central Bank is going to blink first, it looks like it will be the UK.
The appetite for stocks are so high right now that any sign of weakness gets snapped up. The Nasdaq was down 25 dollars pre open yesterday and finishes the day up 40 dollars, with 4 ticks making up a dollar, that's more then a 240 tick move up pretty much in a straight line, as fund managers chase performance coming to year end. This will lead to buying at any cost, and especially on any pullback.
Today's action paints a similar story, despite weak CISCO numbers, the NASDAQ is almost positive again, and ES making new highs, 12 points away from hitting 1800!! Up too much too fast? It doesn't matter, this bubble is getting bigger like the FEDs balance sheet, and it doesn't look like QE is going to go away anytime soon.
As far as Bonds are concerned, as you would expect Spreads have been shifting lower, as Yellen says QE is the best course of action at the present moment. We are trading 4.5s again in Dec14Mar15, after going to 6s a couple of days earlier, this presents a good buying opportunity again, enough for 1/2 tick at least.
On the UK front, slightly weaker retail sales pushed Short Sterling higher, after an initial downward spike on the higher estimates for GDP from Mark Carney in the UK inflation report. However the Spreads are pushing down along with Euribor and Eurodollar, although if one Central Bank is going to blink first, it looks like it will be the UK.
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