Massive hedge funds do more, the dollar index rising trend is expected to continue

The dollar index edged gapped at 83.24, after continued to rise slightly on the red on Friday to close at 83.11. Technical implied long confidence has been significantly improved.

FXWW established by Sean Lee said, hedge funds have been busy recently to buy long dollar positions. With a lot of money tend to flow to the U.S. dollar, the dollar index last week rose sharply since April 4 test fails, the second close to the 83.50 resistance.

Sean Lee also said: "The move means that hedge funds in the last week, the end of a major push into the U.S. dollar index and consistency buy, the dollar index rising trend will continue for some time."

The Fed planning QE exit road map

Since the Fed announced in September last year to expand the size of the bond-buying program, the U.S. stock market sharply higher, the major indexes repeatedly hit a new record high.

However, one of the rumors on Twitter investors awakened: the pace of the Fed's exit is getting closer, it is time to prepare for.

Non-groundless

9 pm local time, a Twitter news shocked the entire market, the news that the Fed News Service, "said Jon Hilsenrath will shortly issue a Fed will purchase earlier than expected slowdown in the scale of debt reported.

Jon Hilsenrath has been on Wall Street that Fed Chairman Ben Bernanke's mouthpiece, the news quickly spread in the market after the zerohedge many influential website broadcast.

Subsequently, the Fed planned easing "exit road map" rumors everywhere, then decline in the price of U.S. Treasury bonds, the dollar along with upside, the U.S. stock market also ended the day after five consecutive trading days of rising prices.

10 days after the closing of the stock, Jon Hilsenrath published an article entitled "Fed stimulus formulate an exit plan.

The article pointed out that Fed officials are already planning a strategy to exit the bond-buying program, this strategy is still under discussion Fed has sufficient flexibility, which is determined by the market in accordance with the clear Prior experience is expected to step. Fed plans a phased reduction of the scale of the debt purchase, change the number of purchase bonds according to their progress in the employment and inflation, but when the plan is still controversial.

In addition, Fed officials want to be able to clear this strategy and let the market do not overreact.

Or three-step

Currently, the Fed is running the fourth round of quantitative easing monetary policy, a monthly purchase plan amounted to $ 85 billion debt. The Fed had already released to the market signals, ready to speed up or slow down the speed of bond purchases in accordance with the progress of the economic outlook. Jon Hilsenrath stressed that most of the recent Fed minutes show the Fed there is a greater flexibility in the management of the debt purchase plan.

Wall Street is widely expected, the Fed's quantitative easing policy will continue into 2014, but is likely to start from the fourth quarter of this year to reduce the scale of the debt purchase and take a three-step strategy to exit quantitative easing. JP Morgan chief economist Ferrari, the the Fed first step might share the scale of debt reduction to a month 50000000000-60000000000 U.S. dollars, the second step is then reduced to $ 30 billion, and then stop the debt purchase. However, investors still worried about the first time the scale of debt reduction of share will be misinterpreted as the tightening cycle, and then cause the rapid rise in market interest rates.

Wall Street Journal survey of private sector economists showed that 55% of respondents expect the Fed began to tighten in the third or fourth quarter of this year to purchase debt scale, 45% of respondents expected to wait until next year or was later to have the action, no respondents believe that the the next Fed will expand the scale of the debt purchase.

Bloomberg research shows that in the fourth quarter of this year, the Fed will purchase monthly scale of debt is reduced from $ 85 billion to $ 50 billion. According to CNBC research shows that Wall Street expects the Fed will start in February 2014 to reduce the scale of the debt purchase a complete end to the wide amount of time expected after July 2014, the first rate hike will occur in the second quarter of 2015.

Foam manufacturer?

This week, five local Fed President Fisher and Plosser and Fed Governor Raskin will deliver a speech, Bernanke also on long-term economic outlook speech, investors can get more information about the Fed planning to exit bonds purchase program message. In addition, the Federal Reserve held a meeting on interest rates in June, July and September, respectively, market participants expect Bernanke will have the opportunity to explain its exit plan in a news conference in June and September.

Fed officials support debt purchase plan has also hinted that the economic outlook is more optimistic, while willing to consider began to withdraw from the debt purchase plan.

France announced the end of the fiscal austerity of

Pierre Moscovici, the French finance minister, announced on Sunday (May 5), have been the end of the fiscal austerity measures. Earlier, Germany and France again on deficit reduction dispute, Germany immediately provide flexibility issues of deficit reduction.

Moscovici said Sunday in an interview with the French media, "we are witnessing the end of the fiscal austerity toward dogmatic, fiscal austerity is the only tool to fight the debt crisis in Europe;" over the past year, we have been calls for the implementation of conducive to the promotion economic growth policy. fiscal austerity is the stumbling block to achieve economic growth. "

In Germany is about to usher in election Moscovici and German Finance Minister Wolfgang Schaeuble barriers, highlights the economic situation in Germany and France differentiation, and Francois Hollande in 2012 May replace Nicolas Sarkozy  issued by the voice of the anti-crisis after French President.

European Union (EU) Economic and Monetary Affairs Commissioner Olli Rehn has proposed to France the EU under the deficit reduction period of two years.

Germany within the ruling coalition legislators are fighting back. Schaeuble belongs CDU budget policy spokesman Basler Norbert Barthle said: "We have made it clear to the German government, Chancellor Angela Merkel (Angela Merkel) and Finance Minister Schaeuble said that the French realize EU deficit reduction specified time year 2014 is the limits of what we can accept. "

Basler said in a telephone interview on Friday (May 3), France must demonstrate that they are willing to implement structural reforms.

Merkel's campaign

In the Sept. 22 election, Merkel will seek a second term as prime minister of Germany, the European leaders in the formulation of policies also have a certain amount of space to play, the European Central Bank (ECB) President Mario Draghi is expected to take the initiative to take action. The risk is that they must be taken in promoting competitiveness and reshape economic growth policies may appear to shrink.

Morgan Stanley  person in charge of the global economy Firestone Joachim Fels said on Sunday that Europe on the implementation of austerity measures to slow down the pace, but as long as the Governments remain the focus on structural reforms, the market should be able to accept.

The European Commission (EC) on Friday (May 3), the euro zone is a record high unemployment rate outlook is not optimistic, and 12.1% of the average level of unemployment is expected to anticipate a dropped to below 12% in 2014.

French finance ministers and central bank governors on Tuesday will visit Berlin

European Commission believes that the French gross domestic product (GDP) may be a recession in 2013, Hollande and Moscovici has become the vanguard against Germany led to cut the budget deficit proposition. Schedule, Moscovici, will visit Berlin, Germany on Tuesday (May 7) and met with Schaeuble, and together with the French central bank governor Christian Noyer, Noah met with the German Central Bank (Bundesbank) President Jens Weidmann.

European Central Bank has cut interest rates by 25 basis points to 0.5% of the new record low on Thursday (May 2), Draghi said the ECB to keep an open mind on the implementation of a negative deposit rate policy.

Moscovici's speech, France's inability to cut the budget deficit target in 2012 and anticipate a budget deficit share of GDP fell to below the EU ceiling of 3% in 2013, but the country will avoid duly punished. The European Commission believes that if France does not adjust fiscal policy, the country's budget deficit share of GDP, is expected to reach 3.9% in 2014 and rose to 4.2%.

Specific flexibility

Schaeuble, a German media said on Sunday that the budget deficit target specific flexibility does exist, but this requires the Fassi between the two countries to implement the necessary reforms in France and Spain, the European Commission will be enacted before the end of detailed proposals, and will be handed over to the finance ministers of the euro area Member States to discuss and decide.

Due to the positive election year in Germany, the the major suspense German voters still worthy of attention from all walks of life, in the senior ally of the current coalition government, the euro area member states to adhere to the budget deficit criteria, such as Basler's call may result in Merkel difficult help France to flex its muscles.

Moscovici said: "I can understand why some of Germany's conservative molecular why not happy with the situation ... For them, this is not a success story, but Germany and France have a common responsibility in Europe, Germany is required for a successful France. "

At the same time, Hollande Merkel put pressure on them overcome the need in the campaign, in order to maintain the euro zone fiscal consolidation through long-term banking union.

Hollande said on Friday, Merkel will soon face test of domestic election in September, she could not give the impression that its attention to Europe beyond the impression of Germany; Germany may wish to be after the election in September and then focus on the banking union up.