I dont have time now to comment fully now but the latest central bank action represents massive intervension in the fx markets.
In summary its clear signal to market participants that no cash is safe. That central banks will be willing to accept overseas soverign debt junk (ie euro debt) as acceptable collateral for fx credit lines in which ever currency the banks require. Its a sort of double whammy providing liquidity to the banks as well as trashed currency as a safe heaven asset. This may have saved the xmas rally. Ive covered some short on the news and even bought a few euros back. This is bullish asset markets in spite of it solving nothing medium term. Short term enjoy the run up. Its good news AUD as the BOA seems not to be involved though this needs too be double checked. Morally im disgusted by the action although the account is rising. Its very good news for gold bugs as it clearly, once again, demonstrates fiat cash is trash!
A reminder here of the last time this action ”saved” asset markets care of Zerohedge.
Rich
(6 votes, average: 4.83 out of 5)
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