As we expected, the reaction of the dollar to a meeting at the rates FOMS held in two phases. Initially, traders started aggressively selling off the dollar while the growth of stock markets and all that (as we predicted) in response to the remaining unchanged phrase stating that the cost of credit would remain exceptionally low levels fora long time. Thus, we have seen: the rates remains a key issue for the markets to date. However, some time after the players have revised their views, and the American currency has unfolded in the opposite direction.
In fact, the Fed did all that and the market had expected, so the initial reaction is highly inadequate (perhaps many still hoped that the recent optimism Bernanke will result in a change tekstovki accompanying statement). Once the players realized that nothing supernatural had happened, the movement unfolded, and everything fell into place. Moreover, we know that recently the market had accumulated excessive amounts of short positions on the dollar.
But too boldly declare that the meeting was quite unchanged. In the quantitative easing policy all the same adjustments were made. Although the amount of money poured into the economy has not changed ($ 1.45 trillion.), The Fed announced its intention to gradually slow down purchases of securities and federal agency securities mortgage-backed securities (MBS), thus prolonging the duration of the program, and are expected to be completed by the end of 1 quarter of next year (and not at the end of this year, as previously planned). However, the Fed added, the situation will be re-evaluated in the light of incoming economic data. Purchases of treasury bonds (worth $ 300 billion) FOMC intends to complete in late October, as announced in August. Contrary to some analysts predicted, in the text of the statement were not mentioned plans for the possible escape strategy, including - repurchase agreements.
So, to date, we have a more positive economic background, supported by official records and comments of representatives of the Fed. However, it is worth recalling that the most part, this burst of activity may be caused by several programs to stimulate demand, which is about to finish their actions. It was then, and see whether consumer sentiment will change, and together with them and traders. Now check the condition of labor markets and housing: the number of applications for benefits b /d, as well as the sale on the secondary real estate market could once again speak in support of the theory of recovery, which means the dollar might go again to weaken.
EUR
Euro abruptly lost their position at the end of U.S. session, but he fought a very long time, is to pay tribute. Important role, in our opinion, are played and data on business activity. Activity in the service sector and manufacturing sector reflected the eurozone in September of the second month of growth, confirming the improvement in the economy of the leading European countries. Composite index, characterizing both sectors are 16 countries in the euro zone rose to 50,8 pkt. against 50.4 in August. Nevertheless, it is worth noting that a separate index in the PMI manufacturing still remained in the recession zone (below 50-point mark), probably due to the fact that the effect in Germany in the program Cash for crock begins to wane. Today we will be able to test this on data from the report of the German IFO. If the business sentiment still weakened, it may cast doubt on the reality of the transition zone GDP growth in the second quarter. This, in turn, could put pressure on the single currency.
GBP
I pound yesterday began more than a positive, after it became known that the solution of a constant volume of quantitative easing, the program was adopted unanimously. Governor of the Bank of England Mervyn King has agreed to continue the policy of buying assets at stg175 billion ($ 286 billion), abandoning his call for an increase in this program. King and David Miles have decided not to put forward their proposals, made last time, and joined the majority of the committee on monetary policy the Bank of England. In addition, another positive news came from the financial sector. The pace of bank lending in Britain rose in August, since the issuance of new mortgage loans increased, while the volume of loans granted to companies not related to the financial sector, rose the most since February.
However, the impact of the dollar was stronger, and has a sunset of the American session, the pound had to give all earned hard-won. Today's calendar of Great Britain completely empty, so that here first fiddle would play currency, and opponents speeches officials.
JPY
Finally we can talk about the yen, as Japan has yet emerged from a protracted band festivals. On the morning of the Asian currency traded mixed, since the fall of many key regional stock indices triggered cross-selling with the JPY. The arrival of new players on the market have created a fairly high volatility, so we are still witnessing a sharp change of direction.
As the economic picture, today published its report on the trade balance. In August, exports from Japan fell again, as the economic recovery got stuck on the ground. In monthly terms, exports fell by 0,7%, which indicates the possible extinction of the effects of incentives to support the economy in the 2 square. When the world's governments poured into it about $ 2 trillion., Causing sales growth of companies such as Toyota Motor and Sharp.
FOMC did notsurprise
USD
As we expected, the reaction of the dollar to a meeting at the rates FOMS held in two phases. Initially, traders started aggressively selling off the dollar while the growth of stock markets and all that (as we predicted) in response to the remaining unchanged phrase stating that the cost of credit would remain exceptionally low levels fora long time. Thus, we have seen: the rates remains a key issue for the markets to date. However, some time after the players have revised their views, and the American currency has unfolded in the opposite direction.
In fact, the Fed did all that and the market had expected, so the initial reaction is highly inadequate (perhaps many still hoped that the recent optimism Bernanke will result in a change tekstovki accompanying statement). Once the players realized that nothing supernatural had happened, the movement unfolded, and everything fell into place. Moreover, we know that recently the market had accumulated excessive amounts of short positions on the dollar.
But too boldly declare that the meeting was quite unchanged. In the quantitative easing policy all the same adjustments were made. Although the amount of money poured into the economy has not changed ($ 1.45 trillion.), The Fed announced its intention to gradually slow down purchases of securities and federal agency securities mortgage-backed securities (MBS), thus prolonging the duration of the program, and are expected to be completed by the end of 1 quarter of next year (and not at the end of this year, as previously planned). However, the Fed added, the situation will be re-evaluated in the light of incoming economic data. Purchases of treasury bonds (worth $ 300 billion) FOMC intends to complete in late October, as announced in August. Contrary to some analysts predicted, in the text of the statement were not mentioned plans for the possible escape strategy, including - repurchase agreements.
So, to date, we have a more positive economic background, supported by official records and comments of representatives of the Fed. However, it is worth recalling that the most part, this burst of activity may be caused by several programs to stimulate demand, which is about to finish their actions. It was then, and see whether consumer sentiment will change, and together with them and traders. Now check the condition of labor markets and housing: the number of applications for benefits b /d, as well as the sale on the secondary real estate market could once again speak in support of the theory of recovery, which means the dollar might go again to weaken.
EUR
Euro abruptly lost their position at the end of U.S. session, but he fought a very long time, is to pay tribute. Important role, in our opinion, are played and data on business activity. Activity in the service sector and manufacturing sector reflected the eurozone in September of the second month of growth, confirming the improvement in the economy of the leading European countries. Composite index, characterizing both sectors are 16 countries in the euro zone rose to 50,8 pkt. against 50.4 in August. Nevertheless, it is worth noting that a separate index in the PMI manufacturing still remained in the recession zone (below 50-point mark), probably due to the fact that the effect in Germany in the program Cash for crock begins to wane. Today we will be able to test this on data from the report of the German IFO. If the business sentiment still weakened, it may cast doubt on the reality of the transition zone GDP growth in the second quarter. This, in turn, could put pressure on the single currency.
GBP
I pound yesterday began more than a positive, after it became known that the solution of a constant volume of quantitative easing, the program was adopted unanimously. Governor of the Bank of England Mervyn King has agreed to continue the policy of buying assets at stg175 billion ($ 286 billion), abandoning his call for an increase in this program. King and David Miles have decided not to put forward their proposals, made last time, and joined the majority of the committee on monetary policy the Bank of England. In addition, another positive news came from the financial sector. The pace of bank lending in Britain rose in August, since the issuance of new mortgage loans increased, while the volume of loans granted to companies not related to the financial sector, rose the most since February.
However, the impact of the dollar was stronger, and has a sunset of the American session, the pound had to give all earned hard-won. Today's calendar of Great Britain completely empty, so that here first fiddle would play currency, and opponents speeches officials.
JPY
Finally we can talk about the yen, as Japan has yet emerged from a protracted band festivals. On the morning of the Asian currency traded mixed, since the fall of many key regional stock indices triggered cross-selling with the JPY. The arrival of new players on the market have created a fairly high volatility, so we are still witnessing a sharp change of direction.
As the economic picture, today published its report on the trade balance. In August, exports from Japan fell again, as the economic recovery got stuck on the ground. In monthly terms, exports fell by 0,7%, which indicates the possible extinction of the effects of incentives to support the economy in the 2 square. When the world's governments poured into it about $ 2 trillion., Causing sales growth of companies such as Toyota Motor and Sharp.
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