Post by account_disabled on Mar 10, 2024 10:37:25 GMT
Trends break when no one expects them Watching how often big banks change their forecasts from "bullish" to "bearish" you involuntarily recall the story of two analysts: - Do you understand what is happening? - Yes, let me explain... - No! I can explain myself, but understand... Everyone remembers early 2017, when dollar fans were tearing apart their opponents with arguments about the effect of fiscal stimulus on the USD index. On the potential rise in US inflation and the Fed's response through the aggressive rate of increase... Unfortunately, the wind of change began to come from France, where political risks softened, after Emmanuel Macron became president, the eurozone economy grew the highest it has been in the past decade, and Mario Draghi began talking about normalizing monetary policy at the Sintra summit. The analysts have been misled. Anyway, can it be different if people usually feel like Bald Dandelion after a gust of wind of change? LiteFinance: The market can punish for forgetfulness | Litefinance At the beginning of 2018, there were quite a few euro bulls in the market.
Everyone expected the European economy to grow at the same rate and the ECB would abandon QE and start raising rates. Almost all major European banks suggested that EUR/USD should reach 1.3, differing only Bahamas Mobile Number List in the dates of reaching the target. Everyone forgot about tax reform and the potential increase in the inflation rate. The market was like an anesthesiologist's family, in which his wife only a year later realized that her husband was beating her. And it was wrong! In April, investors were reminded of the US fiscal stimulus and the aggressive increase in the federal funds rate. Unfortunately, for many analysts, sclerosis was the last straw that broke the patience of those who hired them. I, of course, know who is guilty; But I wonder what I should do with the corpse... LiteFinance: The market can punish for forgetfulness | Litefinance The market is as confusing as it has ever been.
For example, why, despite all the rules of fundamental analysis, is the yen not rising? The United States is about to boost import tariffs, aimed at China, the truce in the trade war between the United States and the EU is about to end, Donald Trump threatens to leave the WTO. Well, even though the dollar has taken away the yen's status as the main safe haven asset, but what about the status of the financing currency? Could the yen have lost it? But the turmoil in emerging markets should lead to the closing of carry trader positions... Some experts can do nothing but shrug their shoulders in confusion and tear out their hair: - Barrymore, who was howling over the swamps tonight? - Excuse me, sir, I just had a nervous breakdown. LiteFinance: The market can punish for forgetfulness | Litefinance Of course, one can try to explain the rise in USD/JPY by the divergence in monetary policies, or that foreign investors are selling Japan stocks at the fastest pace since 1987. But it's much easier to wave your hand and say that The yen is like a woman. When you start understanding women, you stop understanding yourself.
Everyone expected the European economy to grow at the same rate and the ECB would abandon QE and start raising rates. Almost all major European banks suggested that EUR/USD should reach 1.3, differing only Bahamas Mobile Number List in the dates of reaching the target. Everyone forgot about tax reform and the potential increase in the inflation rate. The market was like an anesthesiologist's family, in which his wife only a year later realized that her husband was beating her. And it was wrong! In April, investors were reminded of the US fiscal stimulus and the aggressive increase in the federal funds rate. Unfortunately, for many analysts, sclerosis was the last straw that broke the patience of those who hired them. I, of course, know who is guilty; But I wonder what I should do with the corpse... LiteFinance: The market can punish for forgetfulness | Litefinance The market is as confusing as it has ever been.
For example, why, despite all the rules of fundamental analysis, is the yen not rising? The United States is about to boost import tariffs, aimed at China, the truce in the trade war between the United States and the EU is about to end, Donald Trump threatens to leave the WTO. Well, even though the dollar has taken away the yen's status as the main safe haven asset, but what about the status of the financing currency? Could the yen have lost it? But the turmoil in emerging markets should lead to the closing of carry trader positions... Some experts can do nothing but shrug their shoulders in confusion and tear out their hair: - Barrymore, who was howling over the swamps tonight? - Excuse me, sir, I just had a nervous breakdown. LiteFinance: The market can punish for forgetfulness | Litefinance Of course, one can try to explain the rise in USD/JPY by the divergence in monetary policies, or that foreign investors are selling Japan stocks at the fastest pace since 1987. But it's much easier to wave your hand and say that The yen is like a woman. When you start understanding women, you stop understanding yourself.