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Reply #38: No "Surprise" To Us! ....Today's Pfenning [View All]

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54anickel Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Aug-04-06 10:46 AM
Response to Reply #11
38. No "Surprise" To Us! ....Today's Pfenning


Well... The Bank of England (BOE) and the European Central Bank (ECB) both did as I thought they would yesterday and raised rates 25 BPS respectively. As I was signing off yesterday, the BOE had wet their powder, and the pound sterling was soaring... So, let's talk about that rate hike first.

The headlines read.... "The Bank of England Surprises The Markets With A Rate Hike" Surprised? Well... I guess anyone that doesn't read the Pfennig might have been "surprised"... We certainly were not, as I had chronicled the sizzling growth, and inflation pressures for the past few months... Anyway... The pound sterling continued its flight to higher ground all day after the announcement, and the statement afterward which left the door open to further hikes.

Pound sterling also got a boost from a story in the U.K. papers yesterday that the Bank of Italy had cut the U.S. dollar portion of its reserves by 21% while increasing its pound sterling portion from 0% to 24%. There were no actual hard numbers discussed... But one would have to figure that we're talking about something that's larger than a breadbox! Pound sterling seems to be stealing the spotlight from the other European currencies right now... Pretty interesting, eh?

Later in the morning, yesterday, the ECB walked the walk, after talking the talk all month about higher interest rates. The euro received little support from the announcement, as I said yesterday that I had thought the rate hike had already been priced into the euro's value. I was, and the markets were, concerned about ECB President Trichet's press conference afterward... Would he back off his mega-hawk stance, or remain dedicated to fighting crime, and seek truth, justice and the American way..... Wait, he's no Superman! But seriously... What would he say?

Well... Grasshopper... Trichet remained a central banker that the inflation hawks can be proud of! How about these two comments from Trichet... "Monetary policy remains accommodative". And... "Progressive withdrawal of accommodation warranted" Ok... For those of you new to Central Bank parlance... Basically Trichet said that rates were still accommodating, which means low... And that, and I loved this statement... "progressive withdrawal of accommodation warranted"... Which means, he feels that he will continue to remove the low rates, and do so with a 50 BPS hike in his back pocket to pull out anytime he believes it necessary to do so.... There! Hope that helps!

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  -STOCK MARKET WATCH, Friday 4 August ozymandius  Aug-04-06 05:23 AM   #0 
  - mislabel  Sven77   Aug-04-06 05:25 AM   #1 
  - thanks  ozymandius   Aug-04-06 05:28 AM   #3 
     - Or Maybe Ozy is trying to tell us something about  RawMaterials   Aug-04-06 09:24 AM   #24 
        - Bush will be photographed wearing mascara.  ozymandius   Aug-04-06 09:14 PM   #67 
  - WrapUp by Martin Goldberg  ozymandius   Aug-04-06 05:27 AM   #2 
  - Today's Reports  ozymandius   Aug-04-06 05:30 AM   #4 
  - Here are some of the numbers for Reports  stop the bleeding   Aug-04-06 07:38 AM   #10 
     - And the markets rejoice!  54anickel   Aug-04-06 08:00 AM   #13 
  - Oil prices continue to fall in Asia  ozymandius   Aug-04-06 05:33 AM   #5 
  - 3 Filipinos workers kidnapped in Nigeria  ozymandius   Aug-04-06 05:35 AM   #6 
  - Iran says oil may hit $100/barrel  ozymandius   Aug-04-06 05:36 AM   #7 
     - $200 a barrel by 2010  4dsc   Aug-04-06 12:38 PM   #52 
  - Good morning all.  ozymandius   Aug-04-06 05:41 AM   #8 
  - Morning Marketeers,  AnneD   Aug-04-06 09:50 AM   #30 
  - A possible look forward...  Buttercup McToots   Aug-04-06 05:59 AM   #9 
  - I caught that one yesterday, I'm not so sure I have his confidence  54anickel   Aug-04-06 08:33 AM   #17 
     - Good Morning, 54anickel  Buttercup McToots   Aug-04-06 09:00 AM   #23 
        - I hope your are correct B. McToots. I hope folks are waking up, and  54anickel   Aug-04-06 09:34 AM   #25 
  - Dollar Watch  54anickel   Aug-04-06 07:55 AM   #11 
  - A peek at the buck now that it's starting to catch up in time here....  54anickel   Aug-04-06 08:14 AM   #16 
  - Whoopsie, looks like another tumble for the buck....  54anickel   Aug-04-06 09:37 AM   #27 
  - No "Surprise" To Us! ....Today's Pfenning  54anickel   Aug-04-06 10:46 AM   #38 
     - Hmm. Let's see, today's watch on Swiss Franc (CHF), Pound Sterling (GBP)  Ghost Dog   Aug-04-06 12:10 PM   #47 
  - Apple Shares Fall as Options Lead to Restatement  54anickel   Aug-04-06 07:56 AM   #12 
  - Apple finds more evidence of options irregularities  54anickel   Aug-04-06 08:50 AM   #20 
  - Secret of the Up-or-Holding Rate: Tuesday's Fed Mystery Theater  54anickel   Aug-04-06 08:03 AM   #14 
  - Stock buybacks spike along with bad news  54anickel   Aug-04-06 08:09 AM   #15 
  - isnt this a way for the execs that hold a lot of stock  RawMaterials   Aug-04-06 11:15 AM   #42 
     - Well, sometimes it works out well for them. Timing is everything.....  54anickel   Aug-04-06 11:24 AM   #43 
  - U.S. Companies' Quarterly Profits Climb 19%, Lifted by Energy  54anickel   Aug-04-06 08:35 AM   #18 
  - 9:35 and open for bidness!  54anickel   Aug-04-06 08:37 AM   #19 
  - Opposing Experts Square Off Over Grassos Pay  54anickel   Aug-04-06 08:52 AM   #21 
  - Mexico's Exchange Blockaded by Lopez Obrador Protests  54anickel   Aug-04-06 08:59 AM   #22 
  - US employment data softer than expected  BareNakedLiberal   Aug-04-06 09:34 AM   #26 
  - Main Street and Wall Street diverge....  AnneD   Aug-04-06 10:44 AM   #37 
  - Japan calls for reform at IMF  BareNakedLiberal   Aug-04-06 09:39 AM   #28 
  - Pension system bill goes to Bush More protection against collapse  BareNakedLiberal   Aug-04-06 09:41 AM   #29 
  - 1,000 pages?!?!? So, what else is in there?  54anickel   Aug-04-06 10:32 AM   #36 
  - REITs Play Monopoly' With Real Money  54anickel   Aug-04-06 09:57 AM   #31 
  - The Pause That Will Not Refresh  54anickel   Aug-04-06 10:04 AM   #32 
  - Along with Peak Oil, Peak Grain and Peak Water, the world enters crisis ov  54anickel   Aug-04-06 10:13 AM   #33 
  - Safe haven assets  54anickel   Aug-04-06 11:54 AM   #45 
  - 11:13 numbers and yada  54anickel   Aug-04-06 10:16 AM   #34 
  - OT - We're All Enemy Combatants Now  54anickel   Aug-04-06 10:23 AM   #35 
  - Almost time? Someone spends time at B3TA!  Gregorian   Aug-04-06 10:50 AM   #39 
  - Gold gains moderate in wake of jobs data  54anickel   Aug-04-06 11:03 AM   #40 
  - 12:06 Lunch break  54anickel   Aug-04-06 11:08 AM   #41 
  - FCC orders Time Warner to put NFL network back on (Thank Bob!!!)  54anickel   Aug-04-06 11:43 AM   #44 
  - 1:08 and mixed messages now appearing  54anickel   Aug-04-06 12:10 PM   #46 
  - Strike that - full on flip flop and everyone is fucked that got in this  stop the bleeding   Aug-04-06 12:20 PM   #48 
     - update triple digit sell off in the DJIA  stop the bleeding   Aug-04-06 12:33 PM   #51 
     - I was wondering if we wouldn't see an afternoon dive. The Adv/Dec  54anickel   Aug-04-06 12:39 PM   #53 
        - Side of blather  54anickel   Aug-04-06 12:41 PM   #54 
        - U.S. stocks fades to losses ahead of weekend  54anickel   Aug-04-06 12:58 PM   #55 
  - European stocks buoyed by weak US jobs data  Ghost Dog   Aug-04-06 12:23 PM   #49 
  - London boosted by weak US jobs data and banking bounce  Ghost Dog   Aug-04-06 12:25 PM   #50 
  - Ewwww, nice article on the "stoopid" Dimson in that link GD. Thanks  54anickel   Aug-04-06 01:10 PM   #56 
  - Buyers Mock Wall of Worry  54anickel   Aug-04-06 01:15 PM   #57 
  - The Landing Pad  54anickel   Aug-04-06 01:25 PM   #58 
  - 2:25 and no sign of the calvary yet  54anickel   Aug-04-06 01:28 PM   #59 
  - yep, hide your daughters hide your wife  stop the bleeding   Aug-04-06 01:30 PM   #60 
  - 3:07 and more red with volumes beginning to show some conviction  54anickel   Aug-04-06 02:10 PM   #61 
  - What do the Markets Think of the War?  54anickel   Aug-04-06 02:32 PM   #62 
  - 3:42 and DOW struggling for an up week  54anickel   Aug-04-06 02:44 PM   #63 
  - Closing time - just waiting on the volume numbers to settle and the yada  54anickel   Aug-04-06 03:09 PM   #64 
     - typical - now it is a holding pattern until tuesday  stop the bleeding   Aug-04-06 03:21 PM   #65 
        - Thanks Stop The Bleeding. I appreciate you and the others chiming  54anickel   Aug-04-06 03:57 PM   #66 

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