Posts Tagged ‘ 1 ’

ECB Cuts Rates 25 Basis Points to 1% – Hawkish Press Conference Q&A Squashes Hopes of Sovereign Debt Purchases in Larger Amounts

December 8, 2011
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ECB Cuts Rates 25 Basis Points to 1% – Hawkish Press Conference Q&A Squashes Hopes of Sovereign Debt Purchases in Larger Amounts

The ECB issued a terse press release detailing an interest rate cut for the main refinancing operations of the Eurosystem (from 1.25% to 1.0%) commencing on December 14th. In addition, the ECB cut rates on the marginal lending facility and deposit facility by 25 basis points. This move was widely expected and had a limited impact on the euro or equity markets. The press conference and Q&A (45 minutes later) with financial reporters was where the real action took place. The only market friendly outcome was the announcement to extend lending to European banks from a one-year to a three-year term. The collateral requirements for these loans are also being loosened. The press conference was predominantly hawkish. When asked about hints earlier in the week that the ECB could...

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Bernanke’s Jackson Hole Speech: Market Could Close at 1,100 or 1,200 Today

August 26, 2011
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Bernanke’s Jackson Hole Speech: Market Could Close at 1,100 or 1,200 Today

The market remains destabilized which is quantified by the VIX index stubbornly remaining in the 40 vicinity. As long as the VIX remains in the 30-40 range investor should expect to see 2-3% moves both up and down in the market from these levels. I believe that the propensity for violent up moves is as probable as sharp selloffs because we are close to levels in the market where a recession is being priced in with a 50% probability. Today, with commentary coming from Ben Bernanke out of Jackson Hole, and a wide array of expectations on what he will indicate from a monetary policy standpoint I see decent odds that the S&P 500 closes at either 1,100 or 1,200 today. That is how destabilized and volatile markets have...

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