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Non-Tech : Bill Wexler's Trading Cabana -- Ignore unavailable to you. Want to Upgrade?

To: ggersh who wrote (5675)	6/24/2009 9:49:44 AM
From: RockyBalboa	Respond to of 6370

Beans, right. The SNB has seen enough today. They pressed the nukem button, when the US side was still asleep and London traders at their casual heavy lunch. See results.

To: ggersh who wrote (5675)	6/24/2009 12:29:54 PM
From: RockyBalboa	Respond to of 6370

SCENARIOS-Potential market reactions to Fed's policy statement NEW YORK, June 24 (Reuters) - Everything from whether to continue flooding the financial system with more cash to the economic outlook is on table at the U.S. Federal Reserve's mid-year policy meeting on Wednesday. Analysts widely expect the U.S. central bank will predict the economy will recover, albeit at below-trend growth, and inflation will stay tame. Investors will also scour the post meeting statement for clues on how long the Fed will maintain its near zero interest rate policy and whether it will expand its quantitative easing program, especially the purchase of U.S. government debt, in a bid to hold down long-term interest rates. The Federal Open Market Committee, the Fed's rate-setting group, is expected issue a policy statement at about 2:15 p.m. (1815 GMT) on Wednesday. Below is a summary of what traders and analysts said could be the possible reactions to the FOMC statement in the forex and U.S. stock and Treasuries markets given different outlooks on the economy and the Fed's quantitative easing policy: ECONOMIC OUTLOOK RECESSION TO LINGER, GROWTH UNLIKELY UNTIL 2010 * Stocks: Stocks will sell off as most people are expecting the Fed to be rather optimistic in its assessment of the economic outlook. * Treasuries: Yields will likely fall broadly on the expectation the Fed will keep rates low in an effort to revive growth. The benchmark 10-year note yield, which last traded at 3.63 percent on Tuesday, could decline 10 to 15 basis points. * Currencies: The dollar could rise against the euro on safe-haven buying with the euro testing Wednesday's low just above $1.40. GROWTH EMERGES BY YEAR-END WITH INFLATION STAYING TAME * Stocks will see an immediate pop, but as most investors generally expect the Fed's statement to reflect such a positive stance anyway, the run-up will be short-lived. A sign that growth is in sight will benefit cyclical sectors like energy, industrials and technology. * Treasuries: Short-term yields could rise more than longer yields on fears over the Fed raising rates to curb future inflation pressures. Two-year Treasury note yield , which last traded at 1.10 percent on Tuesday, could fall below 1 percent. * Currencies: The dollar could hold steady or fall on the expectation inflation will remain tame and that the Fed won't increase interest rates soon. A key level to watch is $1.41 in euro/dollar. If the pair goes above that, it could trigger further buying of the euro against the dollar. GROWTH RESUMES WITH RISK OF RISING INFLATION * Stocks: Stocks could go sideways to lower as the specter of inflation would raise the risk of the Federal Reserve taking away stimulus too soon and making it likely that the economy might see a double-dip or a W-shaped recovery. Investors will key-in on how the Fed might balance price stability and foster growth at the same time. * Treasuries: Longer yields rise more than shorter yields on heightened worries about growing long-term price pressure. Benchmark 10-year note yield could rise 10 to 15 basis points. * Currencies: The dollar could rise as markets may start pricing the start of the Fed's tightening cycle. The dollar index could trade above 81 <.DXY>, a level last hit June 16. QUANTITATIVE EASING MORE TREASURY PURCHASES OR FED BUYING LASTING LONGER THAN EXPECTED * Stocks: They are likely to rally on expectations that further quantitative easing will help hold down long-term borrowing costs in the long run, boosting the outlook for housing, whose downturn triggered the latest recession. * Treasuries: Yields may fall broadly led by the long-end as the Fed absorbs even more of billions in new debt sold to fund the stimulus package and various bailouts. Ten-year yields could fall by 10 to 15 basis points. * Currencies: The dollar could fall on worries that rising money supply could diminish the value of the dollar. The euro could trade well above $1.41 against the dollar. HINTS OF PLAN TO END QUANTITATIVE EASING * Stocks: The move would give the stock market a positive bias as it will likely be seen as reinforcing hopes that the economy is on the road to recovery. At the same time, there could be some selling by those investors worried that the Fed is stepping away too soon. * Treasuries: Yields could jump broadly led by the long-end rising as much as 15 basis points on news a big buyer of Treasuries plans to leave the market. On the other hand, longer yields could fall as the move signals the Fed will unwind monetary stimulus quickly and turn its attention to curb long-term inflation pressures. * Currencies: The dollar could rise against major European currencies with higher long-term yields compensating for the higher risk associated with holding the greenback. (Reporting by Richard Leong, Gertrude Chavez-Dreyfuss and Ellis Mnyandu; Editing by Theodore d'Afflisio) ((richard.leong@thomsonreuters.com ; +1 646 223 6313; Reuters Messaging: richard.leong.reuters.com@reuters.net)) Keywords: USA FED/BONDS

To: ggersh who wrote (5675)	6/24/2009 12:34:46 PM
From: RockyBalboa	Respond to of 6370

Dollar rallye before the fed, falls afterwards? Swissie totally hammered, off 3% The Euros I posted today, well they stick!

To: ggersh who wrote (5675)	6/24/2009 2:38:44 PM
From: RockyBalboa	Read Replies (1) \| Respond to of 6370

Nice call, $ rallye after the fed; EUR longs are trapped, DX just climbed back to 81.

To: ggersh who wrote (5675)	6/24/2009 2:40:51 PM
From: RockyBalboa	Respond to of 6370

And the reaction is: >>> GROWTH RESUMES WITH RISK OF RISING INFLATION * Stocks: Stocks could go sideways to lower as the specter of inflation would raise the risk of the Federal Reserve taking away stimulus too soon and making it likely that the economy might see a double-dip or a W-shaped recovery. Investors will key-in on how the Fed might balance price stability and foster growth at the same time. * Treasuries: Longer yields rise more than shorter yields on heightened worries about growing long-term price pressure. Benchmark 10-year note yield could rise 10 to 15 basis points. * Currencies: The dollar could rise as markets may start pricing the start of the Fed's tightening cycle. The dollar index could trade above 81 <.DXY>, a level last hit June 16. <<<<<