FUNDAMENTAL REVIEW 12.09.12

 

Markets are focused on the Fed meeting

 

Apparently, the Constitutional Court is not not interfering in todays ratification of ESM and Financial Covenant. If it will be approved, it will surely increase the confidence of investors in the German authorities and will show that the Germans still ready to fight the crisis, and not to sit with the expectation of everything to resolve by itself. Because of this the single currency is raising again in the foreign exchange market.

 

A two-day meeting of the Fed, the results of which will be known tomorrow is an additional supporting factor of propensity of investors to the risky game. Probability of the launching of new stimulus increases demand for 3-year U.S. government bonds, which indicates the possible prospects of increasing the term of the monetary authorities in 2015. And this in turn suggests that the Fed may actually go to a new program QE 3, the more recent data from the U.S. labor market is pushing her to do so. An additional factor that points to it, is the beginning of growth of yields on 10-year government bonds.

 

So, most likely, the Fed in line with the new stimulus package will stop the program Twist 2, which was sent to the preferred redemption of long-term bonds. And if indeed Bernanke will go to drastic measures, it will have a lot of pressure on the U.S. dollar and will have a standard growth of risky assets. First of all gold, silver and other commodities and commodity assets. The stock market will also receive support and revive the stock markets of developing countries.

 

Today we should pay attention to data from the UK and the eurozone.

 

Events today:

Moscow time

12.30 UK Changing the number of applications for unemployment benefits in August n / a; 100; -5.900

12.30 UK unemployment rate in July n / a; 8,0%; 8,0%

12.30 UK index of average wages in July n / a; 1,5% 3m / y and 1.6% 3m / y

13.00 Eurozone Industrial Production July n / a; 0,0% m / m, -0.6% m / m

13.00 UK's leading indicators index in July n / a; n / a; -0,3% m / m

15.00 Great Presentations by the Monetary Policy Committee of the Bank of England Broadbent

16.30 U.S. Import prices in August n / a; 1,4% m / m, -0.6% m / m

18.00 U.S. Wholesale Inventories July n / a; 0,3% m / m, -0.2% m / m

18.30 U.S. Crude Oil Stocks for the Week 2-8 August n / a; n / a; -7,4 million barrels.