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Draghi's Silver Tongue, Heeding Lockheed Martin and Awaiting Adobe: Market Recon

Stephen Guilfoyle

What I saw was the euro fall off of cliff, the U.S. Dollar Index (DXY) spike, and Dow futures run from well below fair value to well above in response to European equity markets doing the same. In response, at least in the middle of what some of you call night, 10-year German bunds were yielding a negative 0.295%, while U.S.10-year notes were giving up 2.05%, suggesting that if the ECB is preparing to once again crank up their purchasing of sovereign, agency, and corporate debt (quantitative easing), that the Fed might need to be more dovish. Keep in mind that in addition to the Federal Open Market Committee (FOMC) policy meeting that kicks off here on Tuesday and culminates on Wednesday, that the markets will hear from the Bank of Japan on Wednesday and the Bank of England on Thursday.