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The FOMC’s James Bullard stunned markets with a suggesting to shelve the end of QE. Is this for real? While nobody is sure, markets certainly reacted.

Here is the view of SocGen about this idea:

Here is their view, courtesy of eFXnews:

The idea that delaying kicking the easy money habit is going to make the eventual normalisation easier is incredible, notes SocGen.

“It’s been clear for a long time that the effect of an excessive gap between cost of money and growth rate of the economy, has been excess in asset markets: artificially depressed volatility, artificially high commodity prices, and absurdly over-valued higher-yielding currencies,” SocGen argues.

Correcting this mis-pricing won’t be painless but as with kicking a caffeine addiction, delaying it doesn’t make it easier, it just increases general tetchiness,” SocGen concludes.

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