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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Benkea who wrote (49426)	5/4/2000 10:28:00 PM
From: John Madarasz	Respond to of 99985

Mr Moto Sez: Fed Open Market Activity Apr 17 Week Day Action Amount Duration Mon add $6.60b overnight Tue add $3.69b 2-day Wed add $5.04b overnight Thu add $28.5b 28-day Fri Easter Holiday ************************** Apr 24 Week Day Action Amount Duration Mon add $2.00b 10-day Tue add $NR 2-day Wed add $7.52b overnight Thu add $3.51b 7-day Fri add $NR weekend NR = not recorded The Fed on Monday conducted an overnight system repo, as well as a $4.025 billion fixed 3-day system repo, with the funds rate trading at 6-1/8%, above the 6% target. They will likely conduct further system repo's in order to satisfy their $10-15 billion add requirement. The large add need has everything to do with tax receipts moving out of system reserves and into Treasury's accounts. Market bears should hope, of course, that none of the add needed comes in the form of permanent reserve injections. The Treasury on Monday repeated a $30 billion figure for buybacks through the calendar year. Also, the expectance of a rapid tightening schedule from the Fed has certainly been reflected in the fed funds rate futures, which are now indicating another 100 bp of Fed tightening by the end of the year. Permit me to dispel one unrelated item before I end. That being a rumor substantial sums have been flowing into U.S. equities from non-Japan East Asia. If such is the case, it must be a recent phenomenon; and someone must be privy to a much larger and more current database of statistics than nearly anyone else. If Hong Kong were used as a reference, the opposite would be nearer the truth. Too, one look at the reduced trading volume throughout the SEAsian region when a holiday closes the HKSE should be sufficient indication of Honk Kong's impact and suitably for reference. HK investment funds have shown a much larger preference for both Japan and Europe. In fact, for two months during the first calendar quarter HK funds experienced net redemptions for U.S. equities. I've not investigated Japan's recent preferences. Lastly, the Swiss National Bank announced Tuesday that it had begun on May 1 the sale of part of its gold reserves, as allowed under a new federal law that took effect that day. The SNB said it intends to put up to a maximum of 120 tonnes of gold on the market by the end of September 2000. beartopia.net See you next week.