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Draghi Disappoints, Loses Majority On ECB Council Dec. 5, 2014

No QE From ECB, For Now Anyway

You just cant make this stuff up. Its crazy how the powers that be think they can manipulate anything and everything. I guess to some degree they can with some success but then again its one of those things that works until it dont.

The articles this morning are a telling picture of just how messed up everything is and showing clear signs of them losing control of their manipulation scheme. For example Draghi didnt do the massive QE program some were expecting. I am pretty sure he will in the future but whats disturbing is the jumping from one side of the fence to the other apparently not really knowing what they will do. I am still having a hard time making sense of these headline quotes.

*DRAGHI SAYS ECB TO REASSESS CURRENT STIMULUS NEXT QUARTER, MAY NOT DECIDE ON NEW MEASURES IN JANUARY
*DRAGHI: DECISION TO CHANGE BALANCE SHEET LANGUAGE NOT UNANIMOUS

Then just a couple hours later this.

*ECB SAID TO PREPARE BROAD-BASED QE PACKAGE FOR JANUARY MEETING

Maybe Super Mario was told by his puppet masters he needed to “get to work” as well? What was most interesting this morning was some quotes from the German news paper Die Welt.

From a just released report (google translated) in Germany’s Die Welt:

The outlooks for growth and inflation are bleak. Mario Draghi will therefore open the gmoneyates – and is met with increasing resistance. And on the ECB’s Executive Board, he has just lost the majority.

According to information obtained by “Die Welt”, internal resistance to Draghi is now larger than previously thought. He can no longer count on a majority within the Board currently. In the vote on the official opinion of the Governing Council on monetary policy are for information of the “world” three of the six directors supported by the President to the original tune. 

In addition to Sabine Lautenschlager and Yves Mersch, who had already previously expressed skepticism about bond purchases, one can now add the Frenchman Benoît Coeuré who is against Draghi’s course.  …There had been dissenting voices within the Board on several occasions, but there was always a majority behind the President.

 “Draghi is still able to enforce his position easily. Because ultimately decides the proportion of votes on the Board, but in the 24-member Governing Council, in addition to the directors and the governors of the national central banks are represented. Among them there were reportedly more votes against, among others, Bundesbank President Jens Weidmann.”

Lastly the Bloomberg report.

Here is Bloomberg’s Jana Randow:

  • European Central Bank Governing Council expects to consider proposal for broad-based asset program including sovereign debt next month, two euro-area central-bank officials familiar with deliberations said.
  • Package envisaged to include all kinds of bonds, no equities
  • Package hasn’t been designed yet; no decision on implementation taken yet
  • Composition of package may be influenced by incoming data
  • Officials asked not to be identified because discussion is private
  • ECB spokesman declines to comment

I will say it again. You just cant make this up. I can only think of one word to describe whats going on these days. FUBAR

EUR/USD Blasts 170+ pips up on Draghi Disappointment

The 170+ pip move on the EUR/USD yesterday does qualify as a push but running that far leaves the probability for them holding in a range with no direction until they are convinced Draghi will be able to go full retard. Therefore trading the most significant levels at 1.2359 for a long or 1.2419 for the short will be what I look for today. The reasons I am willing to short lower than yesterdays highs are that I doubt they will push that high if they do want to run it lower, its a daily level and has the hourly 200 close for confluence. Of course the set up will need to be clear and I do prefer the long but remaining open on direction is best in this case.

EUR/USD hourly chart 12-5-2014

GBP/USD Whip Saw Price Action

The whipy action on the GBP/USD shows they still have no plan as of yet for this pair so yet again the best levels will be 1.5715 for the short and 1.5630 for the long today. The 1.5651 is valid along with yesterdays lows but weaker. I will be looking to see that the weak conviction outside of the triangle forming on the hourly chart is confirmed during London today but as I mentioned in the live training the conviction on this pair during Asia is more likely false. If London does hold it down without testing the next level then I will lean more for the short. Otherwise I will wait and see what happens at the 1.5630 level.

GBP/USD Hourly Chart 12-5-2014

EUR/JPY Runs Euro Strength

The EUR/JPY showing tight correlation to the EU move shows they weren’t thinking much about the Yen yesterday. The probability of the next move up is much better but seeing the Yen weakness is preferable with the UJ going up as well. I will consider the long from 148.12 but if they cant retrace there during London today and run to yesterdays highs I will look for a clean set up short.

EUR/JPY Hourly chart 12-5-2014

Forex News Today

The only significant release during London is German Factory Orders. Expected to drop slightly it will need a large miss to get them moving before NFP during the NY session. Considering German data as of late, I see the probability of a miss to the downside higher but in order to get them pushing will need to go negative. There is Euro Zone GDP as well but unless it misses drastically they are more likely to just use it to run stops on a miss.

The US Non Farm Payrolls and Unemployment rate has potential to get exciting today but I see the probability low unless by chance it pops above 300K or drops below 200K otherwise with employment taking the back burner these days there wont be much to see. There is also a Fed member speech that will have potential of more QE or rising of interest rates sooner than expected drops form Mesters mouth. Of which I doubt.

Have a great weekend

Chad

MY APOLOGIES FOR THE BROKEN VIDEO OF INSIDE JOB IN THE COMMENTARY. I DIDNT THINK I WAS COPY WRITE INFRINGING WITH AN ITALIAN VERSION ALREADY ON YOUTUBE. HOWEVER YOU CAN STILL WATCH IT AT THIS LINK. STILL A MUST SEE!

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2 Comments

  1. cor
    cor December 05, 14:56

    I,am a stranger.
    What means FUBAR.

    Like your comments.

    Reply to this comment

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