There are some days when writing about the transfer market feels incredibly empty and sterile: today is obviously one of those days. Adding cynicism to sadness is the reality that tells of how the weekend exercise for all the big banks was to question the possible impact on the markets of the tragic events in Paris.
Nothing surprising or nothing bad in itself, it remains an aspect, perhaps annoying but inevitable, of the professional financial world. Trying to translate events, news and data into price expectations: here the big issue on the table is whether the tragedy in Paris will have repercussions not so much from a macroeconomic point of view, but on the moves of the Central Banks: with the hope that from this does not trigger a climax of geopolitical tension, the answer should be no; the paths of the Fed and the ECB for the near future seem quite marked.
The divergence of these paths also appears to be marked, pointing in clearly opposite directions as summarized by the Euro-Dollar movement of the last month (from 1.15 to the current 1.07): the big question mark remains on the size and speed that the Fed and ECB in their paths and here the discussion becomes more complicated because the correlation rises: strong data in America that open the door to a very "hawkish" Fed could give Draghi more time in the light of a dollar that would probably remain very strong: at the On the contrary, the ECB surprising by exceeding expectations that are already very high would likely produce a depreciation of the euro which in turn could suggest a more wait-and-see attitude for Yellen.
And so what? The reality is that world growth continues to struggle and that without stimuli of an exceptional nature, Europe can hardly avoid the deflationary trap; looking at things from above and forgetting tactical positioning for a moment, the central scenario remains that of a Fed that in December begins the process of normalizing rates, keeping its hands free on the pace to keep in 2016; at the same time Draghi opened the door to a qualitative and quantitative leap in European Qe: size, duration, mix and rates are all components that are unlikely to be moved in unison but more likely to be diluted over several temporal stages, ideally going to "amortize" the steps by the Federal Reserve in 2016.
