TV

Angus Walker
As Ukrainian forces retake territory occupied by pro-Russian militias, the crisis is heating up. Russia could retaliate by cutting off gas supplies to Ukraine and Europe. Around a third of Europe's gas comes from Russia with forty percent pumped through Ukraine.
Article / 21 September 2012 at 15:31 GMT

TradingFloor.com highlights: Apathy returns as QE buzz wears off

Yusuf Yassin Yusuf Yassin
Editor / Saxo Capital Markets UK
United Kingdom

MACRO: The best laid plans of mice & men… or when QE creates apathy

Neil

Neil Staines, Head of Trading at The ECU Group plc:

“The ECB, through its president Mario Draghi, have committed to do ‘whatever it takes’ to ensure the survival of the EUR. Indeed, most of the world's central banks have now embarked on unprecedented monetary easing - through the use of formal quantitative easing in the case of the UK, US and Japan, and backdoor QE from the ECB. However, the past few trading sessions, following on from the Fed’s QE3 and the extended QE targets in Japan, have brought apathy in place of the desired demand. Initially the performance of asset prices following QE3 were as expected, or at least in line with the correlated moves following QE1 and QE2. Yet now, with 10-year US yields at pre QE3 levels and the USD and risk sentiment little altered, markets are beginning to question the efficacy of global central bank actions. If the world's monetary authorities are continuing to promise ‘whatever it takes, the question that will likely rise from here is ‘what will it take’?”

CURRENCIES: CAD outperformance set to ease soon?

John

John Hardy, Head of FX Strategy at Saxo:

“CAD has been going strong on the anticipation and realisation of massive new easing from the world’s central banks. But historically, oil has been a key factor for CAD, and it is waving red flags. The trade-weighted CAD has performed very well lately on the strength of the ‘who’s devaluing the most?’ theme and as crude oil has surged again since the June lows, but note that we have seen a very significant correction lower in crude recently on growth fears and Saudi Arabia talking it down, and perhaps due to a very crowded trade. The trade in long CAD is also very crowded, as I have shown recently. And the run up in the CAD has outperformed the run-up in crude suggesting that when risk appetite goes into correction mode, CAD could be rather hard hit.”

COMMODITIES: Oil price succumbs to selling as QE meets reality

Ole

Ole Hansen, Head of Commodity Strategy at Saxo:

“The unleashing of QE Infinity, as it is now popularly being called, by the US Federal Reserve triggered a renewed push higher for crude oil. But just like HC Andersen’s fairy-tale 'The Emperor’s New Clothes' it did not take long before someone realised that things did not stack up and that QE alone was not going to carry oil prices higher, considering the still weak outlook for economic activity. The dislocation from fundamentals only lasted until Monday, when a huge sell order late in the day triggered what can best be described as a flash crash with Brent crude dropping by four dollars in seconds. In the end Brent crude fell by 9 percent to a six-week low at 107.10 before finding support, with the news flow also supporting the move. Saudi Arabia once again stepped in with some verbal intervention in order to talk the price of Brent crude back down to the 100 dollar level.”

Disclaimer

The Saxo Bank Group provides an execution-only service and all information provided on Tradingfloor.com is solely for general information. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. Saxo Bank Group will not be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available as part of the Tradingfloor.com or as a result of the use of the Tradingfloor.com. Any information which could be construed as investment research has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such should be considered as a marketing communication. Furthermore it is not subject to any prohibition on dealing ahead of the dissemination of investment research. Please read our disclaimers:
- Notification on Non-Independent Investment Research
- Full disclaimer

Show latest activity
Dismiss
Sorry, there was a problem communicating with the TradingFloor.com servers. We are working hard to solve this. Please try again later.
Oops! There was a problem communicating with the OpenAPI Portfolio service.
Oops! There was a problem communicating with the OpenAPI History service.
Oops! There was a problem communicating with the OpenAPI Reference service.
Oops! There was a problem communicating with the OpenAPI Root service.
Oops! There was a problem communicating with the OpenAPI Trading service.
Sorry, there was a problem communicating with the Financial Calender servers. We are working hard to solve this. Please try again later.
Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail