04 January 2013

FOMC Minutes : Some Thoughts

  • Disagreement within FOMC. Evans Rule (2.5% inflation, 6.5% unemployment rate) announced after the Dec12 FOMC. Yet minutes of same meeting now show several members want end to QE before or at end of 2013.
  • Believe that "stated" action will take precedence ie rise in rates last night is a knee jerk reaction that will reverse in due course. Absurd to think that the FOMC, after debate, makes a policy announcement, and then completely disregards it almost immediately. Remember - current UR is still at 7.7%.
  • In any case, got lucky here with open positions. -Copper and +ZN (both Risk Off) supposed to run against +USD/JPY (Risk On). Last night's development turned interest rates into the market driver; so my -Copper gains covered the losses of the +ZN and the +USD/JPY moved deeper into the money (7 big figures now).
  • Buy more bonds.
  • Addendum 05Jan13 4:10 am : S&P trading at 1465. This is not a market that is worried about Fed tightening.

1 comment:

Taichiseal said...

From UBS