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June
13
2018

"If You Ever Needed Proof That Central Banks Have Crushed These Markets,
There You Have It"
Richard Breslow

It's been a while since we featured the grouchy version of Richard Breslow, Bloomberg's  "Trader's Notes" author, who is back with a bang with his latest missive, explaining why "Ignoring Current Events Just Makes You a Slave" and why the mockery of centrally-planned "markets" has gone on long enough...

Ignoring Current Events Just Makes You a Slave: Trader’s Notes

This was billed as the most important week of the year for global markets. And we made it almost through Monday before “exhausted” traders were being advised to shuffle back to their safe rooms to get lost in watching the upcoming soccer matches. Boo hoo.

When in doubt, watch TV is one hell of an investment strategy. If you ever needed more proof that central banks have crushed these markets, there you have it. The belief that nothing matters other than an inconsequential rate hike some time over a year from now in euro land or whether the Fed will make the ever so bold move of raising the IOER by only 20 basis points speaks volumes. And it isn’t being complimentary.

It’s a truly bizarre construct to judge the import and implications of every event through the lens of whether green- pack Eurodollar futures jump or dump half a point. Especially when it’s intermingled for show with nonsense about demographic trends sure to produce a precise outcome 30 years from now. No wonder the smart money is investing in artificial intelligence programs that don’t listen to this tripe. G-7 and Korea aren’t yesterday’s news, unless day trading is your version of investing.

By far, the best thing any of the central bank meetings scheduled for this week could accomplish is to say, “here is what we are doing here and now, this is where we hope to get to and we are playing everything beyond that by ear.” Forward guidance is, we want to raise rates as soon as we can, subject to events. Period. Any idiot could have figured out quantitative easing. History will show that the real heroes are the ones who can get us out of this mindless mess. And from the look of things, it has never been more imperative.

Fed Chairman Jerome Powell is said to be less sensitive to “global headwinds” than his predecessors. If so, it will turn out to be a characteristic that redounds to his credit. If ever a market needed some tough love it’s now. The same should be urged upon ECB President Mario Draghi. At this point, whether emerging markets are taken aback by a faux hawkish Governing Council is their problem. Especially since, with the exception of certain well-advertised basket cases, the asset as a class may have disappointed but has hardly been beaten up.

How much warning about higher rates is required before it no longer dictates global monetary policy? Or before people with large carry positions stop expecting special consideration?

It’s a busy week. Don’t wish it away because there’s a bottle of central-bank administered Soma on the table by the couch. There’s enough dystopian imagery going around, so give Huxley a rest and fire yourself up by reading some Homer as you gird your loins for what awaits on the trading calendar. The men in the short shorts will wait. And if they don’t there is always golf on some other channel.

Through the speciality news product, Bloomberg extends its coverage of news, impacting the world’s most liquid asset class. The product demonstration was conducted by Tod Van Name, Bloomberg’s Global Head of FX and Commodities, and one of the key architects behind the product, Richard Breslow, Editor-at-Large, Bloomberg First Word FX.

The First Word FX product aims to create a simplified yet specialized news service for users of Bloomberg’s market news. Users will be updated in real-time on various news topics. A key feature that is useful for traders, is the ability to take a macro view of any story and add relevant data and follow-up links, e.g. graphs, to provide the user with all the resources needed to assess the story.

Mr. Breslow joined Bloomberg earlier this year, and is supported by a vast number of contributors who have direct industry experience. Mr. Breslow is a former fund manager and has used Bloomberg’s services for over twenty years. Mr. Breslow explained to Forex Magnates during the product briefing, 

“Many of our First Word FX reporters have direct market experience, giving them the background and insight to understand and objectively report on the events that are currently or likely to move global markets. In addition, our unparalleled global network of bureaus give us immediate access to market-moving news and the local knowledge to analyze it. Our job is not to simplify the news, but present the most salient points in a quickly digestible and actionable format. We look at the markets as a correlation matrix, recognizing that no one market or asset class operates in a silo.”

www.bloomberg.com