Wednesday November 16, 2005 - 11:22:00 GMT
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Black Swan Capital - www.blackswantrading.com
EUR hinging on CPI?
“An entire generation of brokers, investors, and analysts who toil in the cyberspace world of Wall Street have never personally suffered through a prolonged bear market.”
We get a look at CPI today in the US. A blowout number will likely rock bond prices and might “help” this tightening spread problem reported in the Journal today:
"In the past three decades, the Fed has tightened eight times and inverted the curve five of those times," says David Rosenberg, chief U.S. economist at Merrill Lynch & Co. in New York. "And of those five, all landed the economy in recession a year later.”
And if we get a surprise on CPI, it’s likely the euro follows bonds lower, despite the fact that we “know” at some point the euro has to bounce from its persistent oversold levels—doesn’t it?
On the flip side, if we get a much cooler than expected CPI number today, the curve inversion scenario is in play—and that should help the euro and host of others badly beaten by the buck of late. Stay tuned.
Black Swan Capital
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