FUNDAMENTAL REVIEW 12.09.12

 

To be or not to be - new incentives from Fed?

 

Investors' opinions divided today in the question - whether Fed's will announce the new stimulus to support the economy or not. About 52% of the respondents (economists, traders and investors) believe that this is possible. But at the same time, there is a lot of skeptics who believe that the Fed is not going to do this, and both of the groups has their valid arguments. But, in general, everybody agreed on the fact that the probability is also high, as its absence. 50 to 50 that's what investors expecting today in global financial markets.

As for our position, we believe that today there will be no strong signal from Bernanke. In such an important point, as the election of a new U.S. president, when all of the candidates are almost equal, the Fed will wait and even it will give a hint of some action, only with a delay before the new year.

In this situation the new data on applications for unemployment benefits in the U.S. may be interesting . If the data will came out worse than expected, it could only confirm a steady trend in the deterioration of the situation, and that, of course, bring the possibility of another phase of quantitative easing.

At the moment, because of the Bernanke’s evening speech, there is no news and statistics which can do the actual impact. Investors will continue throughout the day to adjust their position, as we have pointed out above, the probability of new incentives is 50%.

 

Events today:

Moscow time

Publication 12.00 Eurozone ECB monthly bulletin

16.30 Canada price index on the primary market in July n / a; 0,3% m / m and 0.2% m / m

16.30 The level of capacity utilization Canada Q2. 2012 n / a; 81,1%; 80,7%

16:30 U.S. Producer Price Index in August n / a; 1,2% m / m, 0.3% y / y

16.30 U.S. The number of applications for unemployment benefits for the week 2-8 August n / a; 370,000; 365,000

Basic 16.30 U.S. producer price index in August n / a; 0,2% m / m, 0.4% y / y

18:30 U.S. natural gas reserves for the week 2-8 August n / a; n / a; 28 billion cubic feet.

20:30 U.S. Fed's decision on interest rates in September n / a; <0.25%; <0.25%

22:00 U.S. Fed's publication of economic forecasts

22.00 U.S. Federal budget balance in August n / a; -157,1 billion; -69.6 billion

22.15 U.S. Fed Press Conference