after the FOMC

welcome :)

A few minutes ago we got to know FOMC Statement regarding the the U.S. economy and the possibility of cutting QE in the nearest future.

FOMC Statement

Before we get to the statement, I present a forecasts investment banks regarding cutting QE

Goldman Sachs: It is possible to strengthen or change forward guidance, but it is more likely at the December meeting.

BofA: During the meeting, no decisions will be taken there, FOMC members have suggested that cutting QE3 for now came out of the calendar. After this meeting more interesting will be discussion record in minutes.

Citi: This meeting will bring nothing, our economists expect that the cut will be made ​​by September next year.

Credit Agricole: we expect the first small cut in January.

In the opinion of the investment banks will see a very large variation. Which means that the market is light haos and no one really knows what to expect. Any decision may be some kind of surprise. It is known one, the volatility in the markets will certainly increase.

Now some important facts from today's FOMC Statement

The Communication does not introduce any new changes.

- "We need more evidence of improvement in the economy before cutting QE3";

- "Interest rates remain very low before the unemployment rate at 6.5%";

- "The economy is improving at a moderate pace".

According to the recommendation from 27th October,I still recommend short positions in the EUR/USD

more info: click here

regards,

oscarjp

The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects oscarjp-chrimatistikos current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.

EUR strong ? - inside my recommendation

hello,

At the beginning I present information coming from the Deutsche Borse Group

Speculative accounts increased their net euro long position as of October 1, according to back-dated U.S. Commodity Futures Trading Commission data, released Friday.

The CFTC's Commitments of Traders report - non-commercial, futures-only section, excluding options - showed speculators had a net euro long position of +68,276 contracts as of Oct. 1, versus the prior week's net long of +65,844 contracts.

The position as per Oct. 1 was the largest net long since May 3, 2011, when speculative players had a net long of +99,516 contracts.

The historical situation presenting using the chart dated May 3, 2011:

chart 1. EUR/USD, H4, 2013-10-27

Of course, over the coming days does not have to be similarly. It presents only my observations, my opinion will be at the end.

chart 2. EUR/USD, H4, 2013-10-27

The key event, which drew investors the most attention this week was the publication of outstanding data from the U.S. labor market (the unemployment rate and the change in employment in Non-Farm Employment Sector). The data were published on Tuesday. Read the main component of the publication came out worse than expected - job growth in September amounted to 148 thousand. against expectations of 180 thousand. This information resulted in the sale of the dollar against the Euro. At the moment, the chances of QE3 cut in December are minimal.

If we delve more into the data, it turns out that the unemployment rate fell to 7.2% - the lowest since November 2008. Fed has set itself the target to low of the unemployment rate to 7% by the end of the program QE3, so it is getting closer to reaching yourself target. The market expressly ignored this fact. In addition, the August reading was revised upward, which should also favor the dollar. Therefore, even though the first reaction is justified, it will not be a surprise if the market corrects powerful movements that occurred shortly after the publication of data from the labor market.

The October PMI were generally weaker than expected. Disappointed not only American Index (down by 1.7 points), showing a negative effect of paralysis, but also Indexes from Europe showed results below expectations. Although just an Index for the industry recorded a slight increase (by 0.2 points, It was less than expected), the Index for the services sector declined by 1.3 points.

The IFO Index 107.4 points, expected 108 points, previous 107.7 points.

In the coming week, investors will look forward to the FOMC decision on interest rates in the United States. Here, I do not expect any changes and, more importantly, after this decision is not a press conference. From the USA we will also ADP report, the estimated change in employment in the private sector in October.

According my opinion since Monday I will by short position (buy U.S. dollars). My first pre-shopping I was carrying out on Friday. The next orders I have at 3830 levels. Of course please do not forget about stop loss. Long term target would hit 1.25 - 1.24 



trade safe,
best regards,
oscarjp


The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects oscarjp-chrimatistikos current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.

great start, then a little worse - my two examples trades today

hello,

The following entry would be some kind of warning for the young traders. Maybe, at the beginning let's see the chart.

Chart 1. fSP500, M30, 2013-10-24

I noticed that my last few days the vast majority of my trades is trading on the Indexes. I don't know how and why, it's probably just a coincidence. I hope :p

As you can see in the chart was going to be a pretty good profit. As it is now, everyone knows. Thanks to using the take profit I could just watch the market and from time to time to lower levels of take profit for each trades.

There are some moments in which we do not have access to the Internet, and we can not interfere in financial markets. Then take profit setting ensures us that we do not lose or earn as much as we set in the investment policy.

To all who read my blog, I strongly encourage to use of these tools.

Before leaving my job, I set both take profit at the level 1745 points. Finally profit is about 5 points.

Comments always welcome :)

best regards,

oscarjp

ECB announces the start of stress tests

The European Central Bank announced on Wednesday begin testing the strength of the bigest banks in the Euro zone. The so-called stress tests to take a year and help to restore confidence in the financial sector. This is another step in building a banking union.

The ECB informed that assessment of banks will start in November and will last 12 months. Testing will take care with the ECB national regulators of the Member States participating in the single supervisory mechanism (SSM).

Single Supervisory Mechanism will be the central element of the banking union. The main target of the operation is to improve the stability of the financial sector.

Announced by ECB-depth review of the quality of bank assets will include approximately 130 largest institutions in the euro area. It aims to detect the "problem" loans on the balance sheets of banks in each country. Banks will have to demonstrate that properly classifying our loans and postponed adequate cash to cover you in the event of debts that can not be repaid.

The assessment is based on the EU rules that require banks to maintain capital at 8 per cent. If the tests indicate a shortage of capital, you will need to be supplemented. Test results and conclusions at the level of countries and individual banks to be published in November 2014.

In 2008-2011 the EU issued the equivalent of one third of its GDP on bailing out banks, relying heavily on the money of taxpayers.

Source: Bloomberg, Reuters

best regards,

oscarjp

"Bad is good" still rules - but Are you sure?, and short about the deflation in Poland

hello,

Today, we showed the most important labor market data from the U.S. economy. The Wall Street continues to dominate the thinking of "bad it's good, or poor data is good, because mean that the FED will continue to buy bonds." But today's figures were really bad?

Unemployment rate in U.S: 7.2%, previous: 7.3%, forecast: 7.3% (Unemployment rate lowest since November 2008 !!!) 

Non-Farm Employment Change today showed 148k. is not enough, but the upward revision of the previous reading from 169k. to 193k. and the decline of the unemployment rate shows that the economy is doing well (a positive factor for the stock exchanges).It has just the unemployment rate is a target for the FED. However, employment growth only about 148k. consensus can maintain restrictions QE3 in March next year (the second positive factor exchanges). 

FED at the moment does not have to worry about the discrepancy reports from the labor market (employment and unemployment are two separate studies) - the December meeting will be at the disposal of both the report for October (where you will see the impact of the shutdown) and November (particularly important reflecting the possible negative impact of the shutdown).

Reuters published the Questionnaire regarding cutting of QE:

- 9 out of 15 U.S. Treasury securities dealers expect the first cut QE in March 2014

- 6 out of 15 expected such a move until the June 2014!

- NOBODY expected to start tapering in 2013.

One thing is certain: in October, the Fed did not reduce the QE. Even if the data was great (200K +, 7.2%), this decision unfair because of the uncertainty about the impact of the shutdown on the economy. In view of the weak employment data FOMC will not have a problem.

But at the moment there are no less important. That matters is what happens next :)

Employment Situation News Release - United States Department of Labor

The others today's economic data:

Monthly net capital inflow (August): -2.9 billion, previous: 56.7 billion

TIC Long-Term Purchases (August): -8.9 billion, previous: 31.1 billion, forecast: 30.9 billion

explanatory note:

This data represents the balance of domestic and foreign investment - for example, if foreigners purchased $100 billion in US stocks and bonds, and the US purchased $30 billion in foreign stocks and bonds, the net reading would be 70.0B. The market impact tends to be significant but varies from month to month;

Richmond Fed Index (October): 1 point, previous: 0 point, forecast: 0 point.

explanatory note:

Above 0 indicates improving conditions, below indicates worsening conditions. Tends to have a muted impact because there are earlier regional indicators related to manufacturing conditions;

ATTENTION !!! DEFLATION in Poland

Poland - retail sales in September: 3.9%, expected: 4.4% y/y, previous: 3.4% y/y

The unemployment rate is now 13.0%

Using GUS information we can calculate that since starting in April, July was the only month when retail prices rose an annual basis. In the remaining months, prices fell - both in total and the base (after excluding fuel and food). Thus, while consumer price inflation is still on the "safe positive territory", the CPI basket contains many components, which consumer demand does not affect or is affected little. The same can be argued that retail prices better reflect the inflationary pressures in the economy - in this case, the absolute lack of it.

------------------------------------------------------------------------------------------------------

additional tiny surprise from me :)

Real Estate Market in China

China's four major cities saw record rise in new home prices in September, stoking fears of a housing bubble.

Prices in Beijing, Shanghai, Shenzhen and Guangzhou saw their biggest jump since the government changed its calculation method in January 2011.

Property remains a popular investment choice in China and prices have now risen for nine months in a row.

In the capital city of Beijing, new home prices were 16% higher in September than they were a year earlier. In Shanghai, prices rose by 17% compared to a year earlier.

The southern manufacturing-based cities of Shenzhen and Guangzhou saw prices rise by 20%.

Real Estate Market in Germany

According to the Bundesbank, the houses in Germany's biggest cities may be overvalued by as much as 20%.

Since 2010, prices in Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart and Dusseldorf have risen by more than 25%.

In cities outside the sevens revaluation assessed at 5-10%.

regards,
oscarjp

the most important information delivered today

Hello everyone and invite you to get acquainted with the most important events and information that have taken place today and during last weekend.

The main conclusions after the Evans speech (FED):

- low interest rates will be maintained until we see a clear improvement in the economy;

- inflation below target and unemployment unacceptably high (nothing surprised, little impact on the market);

- We do not see fiscal stabilization;

- Reducing QE3 will extend the time;

- Fed needs to increase monthly employment of 200 thousand.

Existing Home Sales in September: 5,29 mln; consensus: 5,31 mln

Data on retail sales in September in the U.S. will be released October 29

Mario Monti leaves the Italian government.

Bloomberg conducted a survey regarding the Fed's monetary policy. The current consensus estimate is:

◦ cut QE3 in March;
◦ cut of 15mld USD (from the current 85);
◦ shutdown will reduce GDP growth in Q4 by 0.3 percentage;
◦ the end of the QE3 - October 2014.

RBS strategy for Payroll (22nd October):

◦ reading above 200 thousand. and the upward revision of readings for July and August will return the discussion of QE3 cut in December (read - a strong appreciation of the dollar);
◦ 170-180k - gently dollar will strengthen against the EUR, AUD and NZD;
◦ 130-160k - will not be cut by the end of the year, buy EURUSD and NZDUSD;
◦ 100-125 - significant strengthening AUDUSD;
◦ 90k and below - mighty dollar sale.

regards,
oscarjp

too big to fail

JPMorgan Chase has had a bad year. Not only has the bank just reported its first quarterly loss in more than a decade; it has also reached a tentative deal with the Justice Department to pay a record $13 billion to settle a number of outstanding probes of its residential mortgage-backed securities business.

The deal includes to pay $4 billion to settle claims that it misled the government-sponsored mortgage agencies Fannie Mae and Freddie Mac about the quality of billions of dollars of low-grade mortgages that it sold to them. 

(...) J.P. Morgan disclosed last week that it set aside $9 billion additional legal reserves in the third quarter, giving it a total of $23 billion to absorb future settlement and lawsuits.

full article - The Wall Street Journal

The total penalty will consume more than half of last year's profit of the investment bank, which amounted to 21.3 billion dollars. Among the companies listed in the Dow Jones Industrial Average gains above $ 13 billion in 2012, recorded only seven companies. It is possible that part of the penalty JPMorgan Chase could be tax deductible.

Since the recent financial crisis six largest U.S. banks had incurred costs of legal proceedings a total amount of more than $ 100 billion. It's more than cashing their shareholders in the form of dividends over the last five years.

FEDERAL HOUSING FINANCE AGENCY - Settlement with J.P. Morgan Chase & Co.

regards,

oscarjp

To celebrate my 101 post

Dear Traders,

To celebrate my 101 post, I decided to present my today profit trade on fSP500. <chart below>

chart 1, fSP500, M15, 2013-10-17

Currently profit is 13.8 points. Successively at the moment I confined only to raising of stop profit after each small correction. Target to designate the present moment is 1730 points when market reaches that level them I make update my analysis. Take profit is set at the level of 1714.2 points.

any questions ?


regards,
oscarjp

10. Summary of the trades (October 1st, 2013 - October 16th, 2013)

Welcome,

according to the tradition I'm presenting all trades published on my blog in the past two weeks. Markets in the period were strongly predictable. What provides a very good result. It is worth noting that all trades were executed on futures market on Indexes.

trade 1

trade 2

trade 3

trade 4

trade 5.1

trade 5.2

A description of all trades can be found in the individual posts. To facilitate added over links to each of them.

Summary of trades

comments are welcome :)

best regards,

oscarjp

"WE HAVE A DEAL" - Harry Reid, (finally)

"We have a deal" (finally) – American senators worked out a deal, and the leader of the Republicans in the House announced that subjected them to a vote without amendment.

I assume that today's vote will not bring surprises and the deal has already been reached. This means that the government back to work and share with us outstanding data for September.

We are waiting on the payrolls of course, followed by retail sales and CPI. These figures finally decide on the Fed's decision on October 30, the chance to start of tapering is really low.

In addition, information from the Beige Book confirms uncertainty among other things on the labor market - the Fed will almost certainly not be limited QE in October.

Beige Book - October 16, 2013

Finally, unfortunately I have a very sad news. Died Hans Riegel, the founder of the world's most delicious sweets (in my opinion of course) - Haribo jellies.

Hans Riegel, "King bears" - as the media called him - he died at the age of 90 years in Bonn, Germany. He had heart trouble - tells dailymail.co.uk

best,
oscarjp

after the morning HOT NEWS

hello everyone :)

Today morning, you had an opportunity to read my post about the recommendation regarding a short signal on the SP500 futures. Of course, I have bought a short position at the price 1705.7 points and after 3:15 p.m. the Warsaw time when the price have fell to 1696 points, I have put my stop profit to 1700 level. Exactly at 4:06 p.m. unfortunately, I was thrown out of the market and I booked a profit of 5.7 points. <chart below>

chart 1, SP500 futures, M5, 2013-10-15

comments and opinions always welcome :)

best regards,

oscarjp

morning HOT NEWS: fSP500 attention to a small correction.

we have 7:20 a.m., Warsaw time, actual fSP500 is 1705.7 - short targets:

support 1: 1680.6
support 2: 1675.0

after attack the new "high", above 1710.4 it will mean, negation of signal correction.

regards,
oscarjp

The investigation regarding the manipulation on the forex

The U.S. Justice Department has opened a criminal investigation of possible manipulation of the $5.3 trillion-a-day foreign exchange market, a person familiar with the matter said. 

The Federal Bureau of Investigation, which is also looking into alleged rigging of interest rates associated with the London interbank offered rate, or Libor, is in the early stages of its currency market probe, said the person, who asked not to be identified because the inquiry is confidential.

Banks such as RBS, Citigroup and Deutsche Bank are among the institutions that viewing e-mail messages, text messages, phone records of employees related to the foreign currency market, looking for evidence of possible manipulation - according to sources.

More here: bloomberg.com: manipulation on the forex

sweet dreams,

oscarjp

Goldman also sometimes mistaken ;)

hello,

During the week the investment banks have published their positions on various currency pairs. Exactly on Tuesday, Goldman Sachs and Commerzbank published their trades on USD/JPY.

Goldman Sachs maintains a short position from 97.30 with target to 94.00 and stop in 98.00

Commerzbank has a short from 98.27 with stop in 98.30 and target 95.85

As a result, recent increases Goldman Sachs and Commerzbank were "thrown out" on his stop. Current rate is 98.50

According to the latest market information BNP Paribas is to have the following items on the foreign exchange market:

BNP strategists to maintain a short position in EUR/USD from 1.3510 with target in 1.2800 and Stop in 1.3730.
In addition, BNP is holding short on GBP/USD from 1.6040 to target in 1.5330 and Stop at 1.6310

Its financial results announced today, the bank JP Morgan: Earnings per share from continuing operations (EPS) 1.42 USD, expected $ 1.30. $ 7.2 billion for judicial expenses. Revenue lower than expected - 23.9 billion against expected 25.15 billion. Net loss 400mln USD. President J. Dimon says that the company has significantly improved control over the market, so as to avoid further scandals. Expenditure on legal proceedings to decrease in the coming quarters.

and on the end of the week, short funny movie about Goldman Sachs :) nice and safe weekend, oscarjp

Today is a very sad day for Poland

Hi,

Today we had a very "green day" on the financial markets. I hope that you used of my analysis published yesterday and made ​​the decision that led to the increase the value of your portfolio :)

Today, in addition to increases in the stock markets had given a lot of interesting information. The most important of these, which is worth remembering I put below. Happy reading. Comments always welcome.

Take care, oscarjp :)


Industrial production in France: +0.2% m/m; Consensus: +0.7% m/m; previously: -0.6% m/m

Industrial production in Italy: -0.3% m/m; Consensus: +0.6% m/m previously: -1.0% m/m

Unemployment Claims: 

Jump from 308 to 374 thousand. At first glance it seems shocking, but when assembled it into its component data seem to be quite logical. Half of the increase, so 33 thousand. is the result of the processing of outstanding requests from California, where he had for four weeks was broken computer system. In this situation, the previous four readings can you add to the eight thousand. Another 1/3 of growth, so 22 thousand., The effect of the dole applications employees of companies living off government contracts. In this situation, increase the "net" is 11 thousand., The actual situation well illustrated four-week average to 325 thousand., Still at a very favorable level.Of course, that's assuming that the shutdown is about to expire. If not, we will soon have claimsy again at 340k +.

The main conclusions after the speech Bullard:

- By shutdown in October cutting of QE3 less likely;
- Yellen will guarantee the continuation of the Feds policy;
- With low inflation, the Fed can keep QE3;
- September's decision proved to be correct.

The main conclusions after the Mario Draghi conference (NY):

- credit growth rate remains weak;

- monetary policies must support growth, and countries need to reform;

- The ECB has promised low interest rates for a long time; (the only guide)

- guidance helped markets to better read the ECB's policies;
- focus mainly on medium-term inflation.

Very, very, very important information for my region:

Moody's: The CEE hardest to reduce the risk of QE3 are Hungary and Romania. Poland by the agency is relatively average, exposed to strong outflow of capital as a result of the expected decision of the Fed. Least in our region this factor are exposed to Slovakia and the Czech Republic. The degree of exposure to capital outflows due to a reduction QE3 should translate into a potential weakening of the currency at the time of the decision of the Federal Reserve.

Unfortunately, the last nice information for the Polish today. Today we also heard the specifics in terms of the nationalization of the Open Pension Funds (OFE) by the ruling authority. Here are the main ones:

-  Pension funds will not be able to advertise !!! (unfair competition);

- The office will probably need to go in person or send a letter (Who chooses this option OFE? Majority of people forget about that. If there is no publicity, it will result in a large outflow of retirees with pension funds - that is, less money will go to the stock exchange);

- New prudential thresholds: 43% instead of 50% and 48% instead of 55% (information irrelevant, rulers have already shown this year that, as the need arises, even constitutions change);

-  February 3, 2014 all OFE will need to provide 51.5 percent assets to ZUS. In this: All bonds issued by the Treasury and the territorial units of local governments but not only. Will also be taken CASH or bank securities held by OFE!;

- OFE will have a minimum 75% of the funds invest in stocks!;

- 3 months to select between OFE or ZUS from April 1, 2014;

-  Contributions from 2.8 to 2.92%

- The next "window" after two years, then every 4 years;

- Removed the minimum rate of return;

- 30% of the funds can be invested abroad in 2016;

All calculations at the present day. This means that OFE would give out all government bonds worth PLN 124mld, as the later mentioned in the Act assets, even to the 150mld PLN. Then OFE  remain about 142mld PLN, including 120mld in shares (valuation today).

This means that OFE of the machine to reach the required 75% of the investment share. If the valuation of pension fund assets would not change, it's February 3rd invested in equities will be about 84% of assets.

oscarjp

update my technical analysis of the major Indexes from London, New York and Warsaw

hello again today :)

Minutes FOMC: Tapering is back !!!

- Most FOMC members for the restriction of this year and end in the mid-14th year
- FOMC sees a threat in the rising market rates
- fiscal policy reduces the potential for growth
- Economic growth is weaker than previously expected
- Of course, voted against this protocol Mrs. Esther George, which is the biggest hawk in the FOMC

"In light of the mixed data recently, including inflation readings that remained below the Committee’s longer-run objective, and the concerns over near-term fiscal uncertainties, some members indicated that they preferred to await more evidence that their expectation of continuing improvement would be realized. But with financial markets appearing to expect a reduction in purchases at this meeting, concerns were raised about the effectiveness of FOMC communications if the Committee did not take that step. Several members, the various considerations made the decision to maintain an unchanged pace of asset purchases at this meeting a relatively close call."

Chart 1, fFTSE100, H4, 2013-10-09

Chart 2, fSP500, H1, 2013-10-09

Chart 3, fWIG20, M30, 2013-10-09

Minutes were relatively dovish, but NOT so doves as many investors and economists expected. Naturally document Reporter why the FOMC is not limited in September QE hardly hawkish. In the document there are many signals that the majority of the Committee was disappointed with the data, especially data from the labor market.

But came the clear key answer - cut QE was not reasonably ONLY because in the minds of the majority of questions have been raised after weaker labor market data . This means that

a) there is no change in philosophy in action the Fed and even taking the seat by Yellen could mean the continuation of tightening

b ) as soon as the data improve, the Fed will reduce the QE

Not only that. Minutes show that the decision was very difficult , and many members were firmly undecided, fearing the negative effects of any decision to reduce the credibility of the Fed. This confirms the words of the head of the Dallas Fed, Richard Fisher, who argued that the decision to reduce it was very close. This means that for such a decision to the next meeting will also close.

Fed QE no limit in October by the shutdown. All that it means uncertainty about the economic outlook and simply a lack of labor market data for September. But we think the next few months will reveal better labor market data. And that - after a period of uncertainty as to the attitude of the Fed - again should mean reduction of QE. Playing the dollar again so it can make more sense.

best regards,
oscarjp

The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects oscarjp-chrimatistikos current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.

What's new on the market today?

hello Traders,

Today, in front of the most important data (this in the previous post) on the market attracted a lot of information. The most significant were:

Germany - industrial production (August): 1.4 m/m; expected 1.0% m/m, previously -1.7%  m/m (revised to -1.1%)Industrial production w.d.a. (working-day adjusted): 0.3% (y/y), expected -1.4%, previous -2.2 (revised to -2.2%)Positively shocking increase in production for August Germany mainly owe the automotive market. Car production has increased during the period by up to 13.6%.

Today we also announced earlier Evans statement (FED). After his speech the main conclusions can be drawn:

- Supports an increase in purchases under QE3!

- GDP growth in the U.S. is not strong wystrarczająco

- unconventional monetary policy turns out to be helpful

Charles Evans is extreme dove, so his words are not a big surprise.

Today at 21:00 Polish time, President Obama is expected to announce his appointment as head of the Fed chair - the most important financial institution in the world. At least proclaim market rumors, while adding that there will be a surprise: Janet Yellen will be nominated.

regards,

oscarjp

What To Expect From FOMC Minutes?

The following are the expectations for today's FOMC September meeting minutes by the economists at Goldman Sachs, Barclays Capital, Citibank:

Goldman Sachs: The minutes from the September FOMC meeting will be particularly interesting, given the Committee's unexpected decision not to taper asset purchases. Subsequent to the meeting, participants described the decision as a close call. We will be particularly attentive to any discussion of what criteria the Committee will use to determine when it would be appropriate to reduce the rate of purchases, and whether the previous guidance that purchases might be completed in mid-2014 remains appropriate. In addition, discussion of how the forward guidance might be enhanced in the future―alluded to by Chairman Bernanke in the post-FOMC press conference―will be of great interest. Finally, we will look for any further details on the thinking behind the new fixed-rate full-allotment reverse repo facility.

Barclays: At its September meeting, the FOMC surprised markets by not tapering the pace of its asset purchases. The minutes from that meeting may give more insight into why the Committee chose not to taper. We expect the reasons to include softer job growth, the downgrade of the FOMC’s real GDP forecast, higher mortgage rates, and the upcoming fiscal deadlines. We will also be looking closely at the Committee’s discussion of the unemployment rate; Chairman Ben Bernanke had highlighted it as a key driver of tapering in June but backed away from that view in September, and any insight into that change in view will be significant. Most important will be any discussion of the criteria that the Committee will use to decide whether to taper at upcoming meetings.

Citi: The main focus will be on the release of the minutes from the September FOMC meeting. With the delay of taper the major market surprise – we expect clients to comb through the release to see just how “close” the balance was. Broadly, we expect any hawkish reaction to be muted. The balance of speakers since September have weighed heavily on the dovish side, coupled with weaker ADP and ISM numbers, this has lowered the probability of an October taper to almost zero. The surprise factor would be if the minutes turned out to be less neutral than expected – falling either to the dovish or hawkish side. While a hawkish leaning might be discounted, a dovish is likely to rally rates and help with the USD sell-off. USD-CHF in particular looks exceedingly attractive.

Oscarjp: So far, the minutes were the usual opportunity to strengthen the U.S. dollar and declines in the equity markets - a lot of it was in this document votes of the need to reduce QE . This time , however, the situation is different: the tension building for a few months the Fed shocked the markets without making changes, and also significantly softening the tone currently.Minutes to answer one important question : whether the decision to reduce QE was not because the data were inconclusive ? (publication of employment data for August strongly disappointed ), or whether it is a change resulting from the informal leadership that the FOMC by Janet Yellen , which, incidentally, will be today one hour after the publication of minutes nominated to take the seat , which is now sitting Bernanke .Of course, these two options have very different implications for the dollar . In the first case, the time to buy the dollar is right now, in the second we may have to wait a longer period of weak dollar . Richard Fisher ( Dallas Fed chief ) suggested that, after all , in September decision to reduce QE was imminent. If you tell the truth and minutes to confirm the dollar could still get more expensive.

regards,

oscarjp