The effects of the October 8 rate cuts are being felt slowly but they are being felt, especially in the short-end of the yield curve, Finlan’s Liikanen says/ This has not stopped the market from speculating more rate cuts are on the way, especially after yesterday’s dismal US retail sales report.
US equities have recovered their overnight losses and European shares have halved their early slide. This has helped EUR/JPY recover after a very rocky night for the cross. Once again, reports of heavy EUR/USD sales from US real money accounts were heard again overnight.
Liquidity remains awful. One anecdote heard last night had one trader moving the market 25 pips late yesterday afternoon in New York on a “fat-finger” trade. The amount that moved the market? 80 million euros. Back in the day (like a month ago), you could have done that without leaving a fingerprint…