The FOMC announcement showed that the policymakers are starting to think about the possible options in order to wind down the accommodative measures when the economy resumes its growth. Referring to the purchases of mortgage-backed securities and housing-agency bonds, the Fed said that it “will gradually slow the pace of these purchases in order to promote a smooth transition in markets and anticipates that they will be executed by the end of the first quarter of 2010”.
Stocks dropped and treasuries rose in response to the decision and it was when I decided to bet on rising risk-aversion by buying the yen. I sold eurjpy and the trade finally resulted in 50 pips of profit in almost 6 hours. The following charts show the market reactions.
Stocks dropped and treasuries rose in response to the decision and it was when I decided to bet on rising risk-aversion by buying the yen. I sold eurjpy and the trade finally resulted in 50 pips of profit in almost 6 hours. The following charts show the market reactions.
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