FUNDAMENTAL REVIEW 25.10.12

 

Market stabilized in anticipation of elections in the United States ...

 

Yesterday was filled with a large number of events that have helped to stabilize global markets after strong sales on Tuesday amid frustrations associated with the restoration of the American economy. First news that Athens got a reprieve from the budget payments on the loans taken earlier, suspended further decline in the common currency. Then the good news from the U.S. housing market have returned to the markets positive mood. Sales of new homes in the U.S. in September rose by 5.7 percent on a monthly basis to 389,000 units. And at the end of the day the Fed's decision to leave his earlier embarked on a soft monetary policy finally helped stabilize financial markets.

 

In that sense it's very important for investors was further confirmation of the position of the Federal Reserve. Bernanke said the Fed will buy unlimited quantities of mortgage securities and short-term bonds. It is thought that the program Twist-2 will also be in one form or another continued.

 

U.S. bond market's reaction to the growth of the revenue bonds, which indicates that investors believe the Fed and that the situation has improved out of money from bonds into riskier assets will continue.

 

Currency market reacted to yesterday's events clearly, the weakening of the U.S. dollar against major currencies. Yen continues to fall against the dollar on expectations of growing new incentives. It seems that the dream of the Japanese regulator decreases the yen starts to come true.

 

In general we can say that before the election in the U.S. picture won't change. Rates are too high in the event and market participants do not want to risk.

 

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

 

Events today:

Moscow time

12.00 Eurozone M3 money supply in September n / a; 3,0% y / y, 2.9% y / y

12.00 Eurozone private sector lending in September n / a; -0,4% y / y, -0.6% y / y

12.30 UK Preliminary data on GDP growth 3 kv.2012 n / a; 0,6% q / q, -0.4% q / q

12.30 UK PMI services sector in August n / a; 0,5% 3m/3m, 0.1% 3m/3m

14.15 Great Presentations by the Monetary Policy Committee of the Bank of England Tucker

Basic index of 16.30 U.S. orders for durable goods in September n / a; 0,8% m / m, -1.6% m / m

16.30 The number of U.S. claims for unemployment benefits for the week October 14-20 n / a; 366,000; 388,000

16.30 U.S. orders for durable goods in September n / a; 6,9% m / m, -13.2% y / y

18.00 Outstanding U.S. home sales in September n / a; 2,4% m / m, -2.6% m / m

18:30 U.S. natural gas reserves for the week October 14-20 n / a; n / a; 51 billion cubic meters. ft