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Strategies & Market Trends : January Effect 2003 -- Ignore unavailable to you. Want to Upgrade?

To: Londo who wrote (442)	5/6/2003 4:14:59 AM
From: RockyBalboa	Respond to of 666

The USD Train Wreck. At the time of the EUR introduction, the currency traded at 1.18 USD. The low in contemporary history was in the 90s at about 1.36 German Marks per USD which equals an exchange rate of USD 1.45 per EUR. So, there is plenty of upside. The comments of Ben Bernanke certainly helped the EUR higher. The Dutch-french bod of the ECB is vowing against interventions citing them useless as to prevent the inevitable. The CHF is considered a new borrowing currency (vs. the EUR, not the USD), replacing the yen which could see some upside. The Swiss central bank follows a path of calculated devaluation by keeping the rates close to yen levels and selling the own currency thereby showing large book profits. The risk of a rate cut in the EUR zone is in fact lower than both the US and Swiss, per the money market curve. ------------- Ay I type, the EUR hit a new high of 1.1340 (1.1328).

To: Londo who wrote (442)	5/6/2003 7:44:42 AM
From: RockyBalboa	Respond to of 666

The Swiss Franc made it over 75cents in a weird spike together with the gallopping Eur... nailed a few. EDIT, it is crazy to see that the buying pressure on the zero waned so suddenly ...

To: Londo who wrote (442)	5/6/2003 12:26:49 PM
From: RockyBalboa	Read Replies (1) \| Respond to of 666

Any bets from your side on the effect of today's rate decision? My thoughts: There are 2 or 3 very tense situations. The EUR could react into negative territory (25% chances). The natural result of a completely "expected" action + discussion (including slowly improving economy...) could lead to further usd pounding. The tresuries could get a hit, if the economic improvements are stronger than expected (25-30% chances). Stocks could sell off if the fed emphasises that a neutral bias shall be maintained (due to the slow recovery) (40% odds). Somehow, it look as if the treasuries don't behave right. Despite the strong stocks they do not sell off very much. And the spread between the SR and US makes me a bit wondering (the US is a bit too rich). Naturally I would even think that we have "retarded" selling...with a selling frenzy after the verdict is out. I'm tired, from clipping small amounts off the futures. Won't be around much, therefore. -------------------------- Right now we have: EUR 03M 1325, SPX 935 US 03M 3"27 my first thoght would be: long stocks, short eur and short tsy. But I'm not sure yet.