Bobbys Corner-Open Market-Sept.20.2010

Good Morning:

The USD continued to stay weak as we start a new trading week.
Today-we have US data on confidence among US home-builders.  Estimates that the index will stay at a 17 month low is giving markets participants renewed evidence that the US economic recovery continues to stumble.
The USD also lost ground as investors speculate that after tomorrow’s FOMC meeting the Fed will be looking for further ways to keep interest rates low.  As the economy continues to move forward at an anemic pace-the Fed will need to continue with it’s present policy of keeping borrowing costs low, along with additional measures to spur on the economic recovery.

Equity markets were higher (Tokyo closed last night for elders day) .  US Futures are also pointing to a higher opening this morning.
Gold rallied to a new record high, and cotton reached a 15 year high.

Oil:$73.59                                               Gold:$1282.20

HAVE A GREAT DAY & GOOD LUCK

Fed Kocherlakota on the newswires

• Modest recovery likely to continue
• Slight inflation increase in the next 18 months
• 2.5% GDP in the second half
• Expects close to 3% next year
• Recovery more modest than anticipated
• Lack of vitality in labor disturbing
• Expects Unemployment to remain above 8% into 2012
• Persistent deflation is unlikely

The comments are more constructive on the economic fate of the US.  Today the data was more upbeat so his comments are timely. Nevertheless, he is painting in broadstrokes with his comments.

Bobbys Corner-Open Market-August.10.2010

Good Morning:

All eyes will be on this afternoon’s FOMC statement at 2:15 PM.
The USD rose overnight-as market participants await comments by the FED this afternoon on the weakened state of the US economy. There is mounting agreement that the FED will not make any drastic changes in monetary policy now.
This will leave the door open for future policy change in the future if need be. 

The GBP was lower overnight even though UK trade balance data was slightly better than expected.

World equity markets are lower-and US Futures are down 90 pts prior to the NY opening.

Oil:$79.95                                        Gold:$1194.40

HAVE A GREAT DAY & GOOD LUCK

Bobbys Corner-Open Market-August.9.2010

Good Morning:

The first overnight session of the week was lackluster at best, as investors concentrated on the equity markets.
The rally in world equity markets kept the Yen lower-as demand for the safe haven of the JPY waned.
Friday’s weak NFP data from the US weighed heavily on the USD.

The FED is expected to announce a new round of quantitative easing at the end of the  FOMC’s meeting tomorrow.
As the US data shows disappointing results, the  Euro Zone has been showing promising data lately.  The weaker jobs growth data on Friday is showing investors that the US economic recovery is unsustainable without jobs creation.

World equity markets rose-and US Futures are also pointing to a higher opening this morning.  Oil and gold also rose, as did commodities in general.

Oil:$81.40                                                    Gold:$1208.40

HAVE A GREAT DAY & GOOD LUCK

Bernanke, Schmer-nanke?: A preview of the Chairman’s Testimony

FOMC Minutes Meeting

• FOMC didn’t see need for additional ‘policy accodation’
• some fed officials saw risks to outlook ‘shifted downside’
• officials saw prices likely to stabilize in coming quarters
• some fed policy makers saw risks to outlook ‘shifted downside’
• some fed policy makers saw ‘some risk of deflation’
• fed policy makers ‘revised down modestly’ outlook for inflation
• FOMC expected ‘pace of hiring to remain low for some time’
• FOMC saw house prices remaining flat or declining in near term
• about half of the FOMC saw risks of growth having moved to downside
• Fed officials see ’11 GDP growth at 3.5%-4.2% VS. 3.4%-4.5%
• Fed officials saw US economic outlook as ‘softened somewhat’
• most fed officials favored deferring asset sales for some time

FOMC Meeting

• Rates to stay “exceptionally low’ for ‘extended period’
• FOMC leaves federal funds rate target at zero to 0.25%
• Financial conditions have been less supportive of economic growth on balance, largely reflecting developments abroad.
• business spending on wqiptment and software has risen significantly, however investment in nonresidential structures contines to be weak and employers remain reluctant to add to payrolls.
• Prices of energy and other commodities have declved somewat in recent months, and underlying inflation has trended lower.

FOMC Rate Decision

Fed says that economic activity is stronger and the labor market is begining to improve. Inflation is likely to be subdued for some time. FOMC says rates to stay exceptionally low for extended period. They will maintain the current level of 0- .25 for the rate.  Not much of a change in this months outlook.

To review the complete statement by the fed click on the following link:

http://www.federalreserve.gov/newsevents/press/monetary/20100428a.htm

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