Bobbys Corner-Open Market-March.13.2012

Good Morning:

Looks like the Bank of Japan will be agreeable to the prospect of additional monetary easing in the future.
Bank of Japan Governor Shirakawa were fairly dovish-as he stated that the BOJ will continue to fight deflation-but that private investors along with the central government must be major players to boost economic growth in Japan.
Some of the biggest obstacles to Japan’s growth will be the rise in crude oil along with the European debt crisis.

We have US Retail Sales data being released at 8:30 AM.  The data is expected to show an increase of 1% after a .4% increase last month. 
We will have to see if the US consumer opened up their pocketbooks this month.
Also-the FOMC is slated to announce their interest rate decision later this afternoon-2:15 PM.

More Republican primaries are on the docket for today.

Asian and European equity markets are higher-as are US Futures.
Oil is higher.  Gold is mixed, and Silver is higher.

HAVE A GREAT DAY & GOOD LUCK

FOMC Interest Rate Commentary and Headlines

• 2012 growth at 2.2-2.6% vs. 2.5-2.9% in November forecast
• Longer-run unemployment projections signal Fed’s assessment of maximum employment, but assessments uncertain, subject to revision
• 6 of 17 Fed officials see no rate increase before 2015
• 2% inflation target most consistent over long run with mandate
• Maximum employment level largely determined by non-monetary factors
• Inflation target of 2% in its longer-run goals and policy strategy statement
• Not appropriate to adopt fixed goal for employment mandate

FOMC Press Release

http://www.federalreserve.gov/newsevents/press/monetary/20120125a.htm

Release Date: January 25, 2012

For immediate release

Information received since the Federal Open Market Committee met in December suggests that the economy has been expanding moderately, notwithstanding some slowing in global growth. While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated. Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed. Inflation has been subdued in recent months, and longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth over coming quarters to be modest and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that over coming quarters, inflation will run at levels at or below those consistent with the Committee’s dual mandate.

To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy.  In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.

The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Sarah Bloom Raskin; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen.  Voting against the action was Jeffrey M. Lacker, who preferred to omit the description of the time period over which economic conditions are likely to warrant exceptionally low levels of the federal funds rate.

Bobbys Corner-Open Market-December.13.2011

Good Morning:

The greenback lost steam overnight-as investors look ahead at the Fed’s policy meeting today.  Many market participants are anticipating that the Fed will reiterate their pledge to keep interest rates at record lows.  Most feel that the Fed will not reduce any of the stimuli that they have in place.  They may possibly be able to slow down their asset purchase program, but I do not think they will do that quickly.
The FOMC will have their rate decision and comments at 2:15 PM this afternoon.

In news over the pond: 
Comments from ECB member Makuch that the ECB can’t carry out massive bond purchases-as the EU treaty does not allow the ECB to act like the US Fed. 
The markets did see the ECB out in the market buying Italian bonds today.
With banks in Europe under pressure from regulators to boost their capital reserves, many major European banks are selling some of their best businesses so that they can raise the much needed capital.  This practice will most definitely hurt future long term profits, but the banks have no choice at this time.

November Retail Sales rose .2% versus .6% in October.

Oil and Silver are higher, while Gold is flat.

Asian equity markets were lower-but Europe and US Futures are in positive territory.

HAVE A GREAT DAY & GOOD LUCK

Bobbys Corner-Open Market-Sept.21,2011

Good Morning:

I have returned from the 1st Saudi Money Expo, that was held in Riyadh, Saudi Arabia.  It  was a very interesting and informative expo, and the hosts from KSA were most gracious.  I look forward to continued business opportunities in the Kingdom.

The markets are all awaiting this afternoon’s FOMC announcement  at  2:15 PM.  What the Fed has in their back pocket, as their options are very limited at this time, is anyone’s guess.  We will see what they come up with!  Markets participants will be looking to see if the Fed takes an aggressive monetary easing position.  Will the Fed be focused now on the long end, after always concentrating on the short end?
The Fed needs to lower all rates  if it really wants to stimulate lending.  We will wait and see-as it is just a few hours aways.

In other international news-the UN General Assembly is meeting in New York this week.  President Obama will address the session this morning.  The President will apparently try to push for the Palestinians to drop their bid for statehood-as he tries to get both the Israeli’s and Palestinians back to direct peace talks.  The administration feels that there is no shortcut fot statehood with the Palestinians, and that both parties must first make peace before a true state could be established.

European equity markets are lower-and US Futres are mixed.  The S&P is slightly lower-while Dow futures are slightly higher.

HAVE A GREAT DAY & GOOD LUICK

Bobbys Corner-Open Market-April.27.2011

Good Morning:

Risk was back on center stage overnight-as Australian CPI data posted better than expected-pushing the Aussie through the 1.08 handle.
In the UK-GDP printed at .5%, which showed that the UK economy is fairly robust, even with their austerity measures and weak consumer sentiment.  The GBP rallied as many investors were anticipating weaker data.

Markets will be waiting for 2:15 PM this afternoon-which will signal the end of the FOMC meeting-and will feature Fed Chairman Bernanke’s press conference.  Markets are not expecting any interest rate increase at this time-but they are looking for any signal of when the Fed’s QE policy will be coming to an  end.

S&P cut Japan’s sovereign rating outlook to negative.  Costs for rebuilding the country after the March 11 earthquake will no doubt hurt the countries ability to produce products for export, which is the backbone of Japan’s economy.

Asian equity markets were mixed-Europe and US Futures are higher at this time.

Oil:$112.40                                                                 Gold:$1508.90

HAVE A GREAT DAY & GOOD LUCK

Bobbys Corner-Open Market-April.4.2011

Good Morning:

A fairly lackluster start to the week-with no real changes in the majors, and crosses showing very little real net change.
Friday’s good US employment data may begin to prompt the FED to remove some of the “accommodating bias” rhetoric in their statements-but if we see a better employment  data, along with true growth-the FOMC will need to begin to change it’s course of monetary action  sooner than later.

With the Japanese economy paralyzed from man made and natural disasters,  the Japanese government will have no choice but to continue it’s ultra accommodating monetary policy for the foreseeable future.

Commodities rose across the board, as signs that economic growth is gaining traction. 
Equity markets are also stronger-as some $20 billion in new  corporate takeover activity helps keep these markets firm for the time being. 

With no major economic events on today’s calender-and the start of the FOMC meeting tomorrow-we do not expect any earth shattering comments from US officials today.

Oil:$108.35                                                         Gold:$1438.30

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Bobbys Corner-Open Market-March.29.2011

Good Morning:

Federal Reserve member Bullard stated overnight that the FOMC  may not be able or willing to wait out the global uncertainties before the US satrts normalising it’s monetary ploicy.
The uncertainties that he is speaking about are:
1) Political unrest in Middle East and North Africa
2) Japanese crisis (earthquake and nuclear)
3) European sovereign debt problems
4) US deficit

US monetary officials seems to be more hawkish lately, but before any decisions the policy makers better be certain that the US economic recovery is on a positive path, and that consumer sentiment is improving and not deteriorating.  With the price of gasoline rising daily (it sure seems like it), and rising global tensions on the political front-I think we may see  weak consumer sentiment datalater this morning.

World equity markets traded lower-US Futures are higher at this time.

Oil:$103.14                                             Gold:$1415.80

HAVE A GOOD DAY & GOOD LUCK

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