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aussiebear

World Stock Markets Trading Discussion - Toned-down tempo

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big.chart?nosettings=1&symb=AU%3AXAO&uf=

http://bigcharts.mar...com/default.asp

 

 

A general waning for All Ords with the index finishing -0.1%.  Utilities +0.8% was out in front followed by Miners +0.7% with IT -0.6% and Financials -0.5%.

Over in Asia, China and Hong Kong +0.4%, Japan -1.3%, India currently -0.2%.

 

 

On to UK/Europe:

 

 

big.chart?nosettings=1&symb=UK%3AUKX&uf=

 

 

big.chart?nosettings=1&symb=DX%3ADAX&uf=

 

big.chart?nosettings=1&symb=FR%3APX1&uf=

http://bigcharts.mar...com/default.asp

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30 minutes into the week

 

and the first itty bitty dip already bought

 

the only "former" Big Boy allowed to go down is GE

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Fed still buying some MBS. Just less than before. They're cutting $4B a month in purchases. That will rise to $20 B a month over the next year. Which will leave virtually no purchases at all. 

 

 

So instead of the now extinct, I think correct me if I am wrong this month, Fed mid month MBS purchases we get $19.3bn in new Treasury supply this week.

 

https://www.treasurydirect.gov/instit/annceresult/press/press_cashpydwn.htm

 

Not exactly a killer, More on the order of drip drip drip.

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Fed still buying some MBS. Just less than before. They're cutting $4B a month in purchases. That will rise to $20 B a month over the next year. Which will leave virtually no purchases at all. 

So if I understand this correctly, their reduction of the balance sheet/liquidity is really a slow motion slight of hand trick. Just like raising interest rates.  They are still adding liquidity but at a reducing rate over time?

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No. They are shrinking the balance sheet for real. The MBS reductions are only 40% of the total cuts, and they will still result in shrinkage because MBS are naturally paid down every month. The reduction of replacement purchases will cause the balance sheet to shrink. That's real monetary draining. 

 

I write about this regularly at Sure Money. 

 

https://suremoneyinvestor.com/2017/10/look-for-a-long-term-red-lampp-signal-next-week-and-start-shorting/  

 

https://suremoneyinvestor.com/2017/10/its-just-possible-that-ive-featured-your-burning-question-here

 

https://suremoneyinvestor.com/2017/10/look-for-a-long-term-red-lampp-signal-next-week-and-start-shorting 

 

https://suremoneyinvestor.com/2017/09/we-saw-the-feds-major-announcement-coming-heres-what-to-do-now/

 

Sign up for the newsletter and they'll deliver it to you as soon as published a few times a week. This is a subject that I'll be hammering on as time goes on. 

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