Market Wire Update: Cash Is King Ahead Of Contracting GDP - Aug 27 09 7:04 EDT

Cash Is King Ahead Of Contracting GDP

Tenured forex traders will be going to cash ahead of the U.S. Gross Domestic Product numbers that are expected to show a faster pace of contraction than previously thought. The analysts are expecting a drop to -1.5%, from the -1.0% level reported last month. At the same time, 08:30 EDT the U.S. Weekly Jobless numbers are expected to confirm that a shrinking economy needs less workers, and is expected to print at around the same 570k mark as last week.

Neither report leaves much doubt, if they print as expected, that the U.S. economy may still be in the trough phase of the five part (Trough, Growth, Expansion, Peak, Contraction) business cycle. It is accepted that economic releases are lagging indicators at times of transition, but the U.S. forward debt ratios leave no room to miss on these growth numbers.

The Treasury and Fed have priced in perfection in regard to forward growth being able to cover the interest payments on the current account mortgage that China, Japan, the Caribbean Banking industry, and the U.K. own the loins share of.

It all comes down to the S&P futures market reaction as to whether the Usd will get bought or sold; long equities will very likely create a short Usd, and vice versa. "Ahead of time, it may be beneficial to put the kettle on, sit back, go to cash, and watch it unfold" TheLFB Trade Team said. "There will be plenty of chances to play the momentum, stay clear of the 08:30 EDT moment".