Hello Traders,
For 2014 I would like to wish all of you discipline and patience in your trading!
The contrast between US economic strength and Europe’s deflationary headache got even stronger this week. On Thursday, ECB President Draghi outlined his asset purchase plan but left investors with the impression that the program would be too little to beat deflation. Draghi said the ECB’s balance sheet would grow back toward €3 trillion compared to near €2 trillion today, suggesting that the potential universe of covered bond and ABS purchases is up to €1 trillion. Meanwhile, the September non-farm payrolls was +248K complemented by a combined 69K in upward revisions to July and August data. The unemployment rate declined from 6.1% in August to 5.9%, the lowest level since July 2008. The only sour notes were that wage growth was still pretty weak and labor force participation slipped lower. In China, the Occupy Central protest movement took over downtown Hong Kong, driving big sequential declines on the Hang Seng early in the week. The bourse closed for two days of holidays, fell 2% in early trading on Friday and then closed higher. There are real fears that Beijing will not tolerate much more unrest in the city. For the week, the DJIA slipped 0.6%, the S&P500 lost 0.8% and the Nasdaq fell 0.8%. Read the rest of this entry »
