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Treasury Comments on China Adviser

A China Adviser said that Geithner said Fed can’t do QE3, as reported by MNI (Mkt News Int’l.) However a Treasury spokesman commented that Geithner didn’t tell China the Fed is out of ammunition.

FED Requires Top 31 Banks to Submit Annual Capital Plan

  • Fed will publish stress test results for 19 biggest firms.
  • Fed begins 2012 review, stress test same as scenario for annual capital test.
  • Review to include 31 banks with assets exceeding $50B.
  • Fed aims to promote ‘robust, forward-looking capital planning.’

Treasury Sectretary Geithner Speaks at APEC (Asia-Pacific Economic Coorperation)

  • Europe remains ‘central challenge’ to global growth.
  • Says its ‘crucial’ for Europe to move quickly.
  • Europe needs ‘strong plan’ to restore stability.
  • APEC economies in better position to spur growth.
  • Asia must do more to stimulate domestic demand.
  • China must allow it currency to strengthen.
  • Asia should let currencies adjust to market forces.
  • Asia currency policies to help in global re-balancing.
  • APEC economies ‘most vulnerable’ to global slowdown.


Fed Fischer Comments on Further Easing

  • Fishers support for FOMC decision doesn’t mean he backs easing.
  • ‘No reason to dissent,’ as ‘new steps’ not taken.
  • Lack of clarity on US fiscal policy is drag on growth.
  • Say’s he wouldn’t support third round of QE.
  • Still against further easing.

There are no real surprises in this commentary, however we have seen the EURUSD pair inch lower to start the new trading day, moving into an Asian session lacking any significant data.

Forex Market Outlook 10/25/11

By Mike Conlon, on Oct 25, 2011

Well it looks like the market is unaware that there is major risk potential in the marketplace as stocks and commodities took off yesterday and it was “game on” for risk appetite. As a result, the Euro as well as the commodity bloc currencies moved higher despite the Euro debt decision due out tomorrow.

Does the market know something that we don’t? As often is the case, the answer is simply “no”. What the market does know is that it wants to take on risk and wants to buy stocks (especially large fund managers who have posted less than stellar returns) as corporate earnings have been largely better than expected. Throw in higher Chinese PMI data that showed that they aren’t slowing entirely and you have a recipe for gains.

Forex Market Outlook 10/21/11

By Mike Conlon, on Oct 21, 2011

The market has been range-bound headed into the weekend, but man, those ranges are pretty big! I was surprised as I thought we’d see the ranges tighten up but that hasn’t been the case. Yesterday, the markets made huge moves as various news trickled out regarding the Euro debt crisis.

It is times like these when I tend to be more cautious, as it is difficult to know when news may hit or what its impact may be. Yesterday, the markets were selling off as risk aversion picked up throughout the early US session, only to completely reverse after “news” came out that the size of the rescue plan is going to be in the magnitude of $1.3 Trillion, with a “T”. That is encouraging news for the market, as in this case more is better.

Forex Market Outlook 10/20/11

By Mike Conlon, on Oct 20, 2011

This morning all eyes are on Athens where the Greek rioters are protesting against further austerity measures which are to be voted to ensure that Greece is taking the steps necessary to continue the bailout discussion. The Troika will be reporting the economic state of affairs in Greece but so far the sentiment has been that that was Greece has done is insufficient to date.

Forex Market Outlook 10/19/11

By Mike Conlon, on Oct 19, 2011

Yesterday’s market turn-around exemplifies the type of market action we may continue to see until the Euro debt crisis is finally resolved to the satisfaction of the world. Yes, I said the world. Markets yesterday were selling off on lowered expectations that this weekend’s European summit would produce that resolution, but a rumor hit the tape from a newspaper in Euro that said that France and Germany had agreed to expand the size of the ESFS to 2 trillion euros, much larger than had been previously agreed upon.

Fed Governor Lockhart on the Wire

Fed Governor of Atlanta Dennis Lockhart had the following comments:

Forex Market Outlook 10/18/11

By Mike Conlon, on Oct 18, 2011

With the overhang of the realization that indeed Euro zone leaders will not have a resolution in place by next week like the G-20 leaders asked for, it is now questionable what exactly Merkozy were referring to when they claimed to be able to have something ready by early November. Is their timetable still in play? From where I sit, it doesn’t seem likely.

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