Just the NFP�s left on the weeks menu after the expected re-calibration of european interest rates.
Last weeks low (on both Cable & EURUSD) has been a pretty decent ‘short’ barometer this week, maintaining the low risk play of executing with the flows.
BoE have chattered a bit more today (to the markets) regards their intention of adopting Quantitative Easing to assist with their interest rate reduction stimulus.
Structural (short) positions haven�t really been under threat this week/today & I�d be surprised if they got spooked tomorrow.
Sure, they�ll be some profit booking & squaring up of short-end orders into the NFP print & London fix between now & then, so it will probably cause a little swell out there as usual.
We�re not around now until Monday, so hope your end of week forays into the markets are successful ones
In case any of you are unfamiliar with the term & function of Quant Easing, I�ll leave you with a brief summary�…enjoy your weekends.
It�s the means to which Central Banks resort to encourage lending by institutions & spending by consumers, when extremely low interest rates fail to sufficiently stimulate the economy.
So, what happens is the Central Bank (U.S Fed�BoE�ECB etc) buys up commercial banks assets, such as sovereign debt tickets/corporate bonds & other securities, & credits those commercial banks with increased funding. Or to put it another way � they flood the system with money!!
It�s meant to encourage those banks to once agian do business with each other, & also lend this increased funding out to consumers & end business users.
The risk is of course, that folks (including said banks) will merely hoard & save it rather than spend it. But that�s the risk they take with this type of activity.
In essence it�s a credit stimulation exercise designed to increase money supply.