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Fed causing mayhem - Socgen

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 11, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    Kit Juckes, analyst at Societe Generale explained that we've relied on central bankers to fix all the world's woes, when all they could really do was to get the global financial system back on an even keel.

    Key Quotes:

    "Keeping policy too easy for too long and boosting asset markets in the vain hope that this would deliver a sustainable demand pick-up has meant that even a timid attempt at normalising Fed policy has caused two months of mayhem."

    "Now, a growing realisation that central banks' powers are waning has prompted a rush into safe havens. No wonder the strongest currencies in 2016 have been those of countries with big current account surpluses, while most of the countries with big deficits have seen their currencies walloped. I'm not optimistic...

    "Stay short GBP/JPY but tighten stops. Stay short NZD/CAD, get long AUD/NZD, switch JPY/KRW longs into USD/KRW ones. Olivier suggested a nice EUR/GBP long earlier this week, too.

    And someone tell Congress that the tools, for tackling regional and ethnic economic inequality are in the box marked 'Fiscal Policy' and not the one under Janet's desk.

    One of the few things we've learnt in Europe these last few years is that monetary policy has a big health-warning sticker that says 'one size fits all' on the side. We're just getting the stickers saying 'Easy Money may cause harmful side-effects if consumed persistently for long periods' printed...."
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