8/8/2008
The dollar rallied strongly today, breaking key levels versus the euro, the pound, etc, etc. According to market commentators this was due to the ECB's acknowledgement that the global slow down had spread to europe and asia. However, I think this is a delayed response to the fall in oil. Europe is less energy instensive and so will do relatively worse with a lower oil price visa vie the us. In addition a lower oil price means less petro-chemical dollars flowing into Europe.
The funny thing about this is that the oil price has been falling for a while now and I should have seen this move. Trading tip - follow the money, what are the asset allocation consequences of big asset price moves?

7/8/2008
the schatz rallied dramatically today after the ecb was less hawkish than expected. I was short and lost some money. Why was I short? Well, we were at the bottom of the range in yields and the ecb have been consistently hawkish over the course of the year. This was clearly not the correct way to look at it. For starters I should have considered that it was obvious from the price action ( strong ) that the market was short. More importantly the data in europe was consistently weak since the last ecb meeting.
This was the key point. Up until now the ECB got away with being hawkish because the data agreed. In conclusion, the ECB can fight sentiment so long as the data is on its side. It can't fight sentiment and data without losing credibility.