If you held bullish positions this week in commodities, equities and were short the dollar against pretty much any other currency, then this should have been a very successful week of trading. The dollar has been heavily sold against the majors, with respective multi-month highs and lows. The week has had 3 major events the German constitutional court announcing that the formation of the ESM wasn’t unconstitutional, the Dutch elections and Ben Bernanke turning on the taps of the anticipated QE3.
On Thursday evening (London) Ben Bernanke announced that The Federal Reserve will buy an extra $40bn of assets every month until the economy recovers and unemployment falls. Though action by the Fed had been expected, equities rallied, Gold spiked to $1770/oz and EURUSD trades with a 1.30 handle.
My favourite quotation out of the press coverage of the FOMC was by the Financial Times under the headline “QE3 – two intoxicating ingredients”:
“Markets had been expecting Federal Reserve chairman Ben Bernanke to refill the punch bowl. He did, but he forgot the fruit juice. The Fed is now ladling out straight booze.” Full article
Deutsche Bank is seeking to convince rival investment banks to share markets and trading software in an effort to lower industry costs – FT
The new Canadian owner of Logica is to cut 1 in 10 jobs after takeover, roughly 700 jobs weeks after agreeing £1.7bn takeover – The Times
“FSA is harming UK housing market,” says Redrow chairman Steve Morgan - The Daily Telegraph
The Direct Line IPO risks only raising £1.5bn for RBS, and one banker believes “It’s even money between an IPO or bought out by a private equity group -CityAM