If you wanted to cover EUR shorts, you knew you could today.
I think the algos and the market got the Fed minutes wrong. The minutes give elevated importance to EVERY opinion. "Some participants", "many participants", etc. are all too vague to really gauge the breadth of consensus for any particular statement/sentiment. Roll-call votes aren't taken after every statement is made. Members likely make introductory statements - in both polite intent and genuine agreement, such as, "I share so and so's sentiment, but also believe XYZ" or "sure, I genuinely think there is a risk that the market might find the language too definite for a December hike, and I believe we're ready to hike, but if China flares up again, I'm happy to wait another two meetings." Moreover, it's almost certain that the same members get associated with seemingly conflicting statements when consumed in a vacuum.
In short, if you were looking for a reason to cover your EUR short, you knew you were going to get at least one in the minutes that resonated with you - or at least met enough algo parameters to pull the trigger. I probably should have recognized this, especially with DXY pushing up against the 99.90 level. However, my thoughts were, the minutes are a month old. Recent fed speak hasn't been markedly dovish and there's been ample opportunity to walk back the Dec expectation. I promise you Yellen can visit FedWatch. Even if Yellen now knows she won't hike in Dec, she needs to keep Dec firmly on the table right up to the meeting to keep rates buffeted.
Fed Funds futures only registered a 2% decline to 68% for Dec hike, 1.0660 is still holding as resistance, and 30 pips was all the short-covering could induce. Stick to your guns, stay short.
In short, if you were looking for a reason to cover your EUR short, you knew you were going to get at least one in the minutes that resonated with you - or at least met enough algo parameters to pull the trigger. I probably should have recognized this, especially with DXY pushing up against the 99.90 level. However, my thoughts were, the minutes are a month old. Recent fed speak hasn't been markedly dovish and there's been ample opportunity to walk back the Dec expectation. I promise you Yellen can visit FedWatch. Even if Yellen now knows she won't hike in Dec, she needs to keep Dec firmly on the table right up to the meeting to keep rates buffeted.
Fed Funds futures only registered a 2% decline to 68% for Dec hike, 1.0660 is still holding as resistance, and 30 pips was all the short-covering could induce. Stick to your guns, stay short.
