Workshops

Charlotte, NC Workshop and Complete Trading Program
April 16-18

Includes:

* Inside The Banks
* Complete FX Course
* 2 Months PTC
* $500 Rebate option
* and more...

The FOMC moves front and centre Wednesday, having been overshadowed recently by sovereign risks, politics and risk aversion stemming from fears of tightening by the People's Bank of China. Were the Fed to suggest a policy path misaligned with current pricing, already jittery markets could be in for even rockier roads. But the Fed may yet choose to accommodate market pricing, precisely because current growth conditions and general sentiment conditions are unfavourable. After all, the price of a delayed exit seems cheaper than the cost of a 'double dip'. We look at the key issues for tomorrow's decision. (for more details please see UBS Talking Points dated 26 Jan 2010).
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Tags: FOMC

The latest FOMC decision was as expected, with no change to the Fed Funds target range and no additional purchases of Treasurys. The dollar immediately strengthened following the statement before it gave up its gains just as quickly as investors remain uncertain whether previous correlations between risk-seeking and dollar weakness should persist. But the FOMC statement, at the very least, did not spark a mass exodus from the dollar.

The August 12 FOMC statement repeated the line from previous statements signaling no increase in the funds rate for "an extended period"; that line is likely to be removed well in advance of an increase in the funds rate. The statement was changed a little to reflect relative improvement in the economic data recently, with signs that "economic activity is leveling out" (ie, not contracting anymore). Read More...

Tags: FOMC

The Fed reduced the target rate 75bp to a range of 0% to 0.25% and was very aggressive in its accompanying statement. The decision was unanimous, as the FOMC said they were committed to keeping the rate at "exceptionally low levels" for "some time." They did not mention quantitative easing, but they remained committed to using unconventional policy tools to fight the recession. Possible tools include purchasing long-term Treasury securities, purchasing agency debt and mortgage-backed securities and implementing the TALF, which could promote credit extension to households and small businesses. Given that the rate is essentially zero, UBS economists feel like this was as aggressive as the Fed could get. The FOMC decision came after a record monthly decline in the CPI and a mixed start to the Q4 earnings season. CPI was -1.7%m/m (cons -1.3%) as weak energy prices and a weak core CPI (0.0%m/m, cons 0.1%) drove down the reading. In corporate news, a major US bank missed earnings but a large retailer managed to beat expectations. With downbeat expectations for earnings season, there is a greater chance of surprising results to the upside. The automaker story continues, with press reports suggesting the Big Three may yet be given access to TARP funds. However, for the automakers to receive more than the $15bn left under the first tranche of TARP, the Bush administration will likely have to make concessions with Congress in order to access the second tranche. In other news, OPEC will discuss production cuts when it meets today, with reports suggesting a cut of about 2 million barrels per day.
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Tags: FOMC

With No USD buyers in sight, we may see price stabilization or pullback ahead of Firday's data and next weeks FOMC. Read More...

Tags: USD, FOMC