FOREXYARD: Forex News Blog | |
- The Bar for QE3 Remains High
- US Consumer Prices and Spending Steady in August
- Australian New Home Sales Down 8%
- German Prices in Minor Contraction
| Posted: 29 Aug 2011 06:38 AM PDT
As anticipated Ben Bernanke did not offer up any new policy moves during his Jackson Hole speech. Instead he called on Congress and the President to do more for the US economy by supporting responsible fiscal policy and additional measures to stimulate economic growth. By extending the next FOMC meeting by two days the Fed chief put even more for a policy response though the bar for QE3 remains high. The lack of new policy measures was largely expected as Ben Bernanke emphasized his past statements of a slowing US economy and the Fed's ability to act if needed. Bernanke chose to highlight steps the Federal government could take to support the economy. This may now set the stage for a potential stimulus program from President Obama in his September economic speech, one factor that may ultimately help the US economy rise up from the almost 4-year downturn. Key data events this week will likely help to formulate market expectations for additional policy easing measures with the release of Thursday's ISM PMI survey and Friday's jobs report. Forecasts are steadily bearish with expectations declining by 9k between Monday morning and last Friday. In his speech Ben Bernanke did announce that the Fed's next FOMC meeting in September will be extended to a two day meeting. This hints at additional Fed action at the September meeting. But those looking for another round of quantitative easing may be getting ahead of themselves. While the Fed has reduced its expectations for US economic growth, increased inflationary pressures will likely keep any QE3 in the tool chest of the Fed until the risks of US growth expectations are affirmed to the downside or another dramatic swing lower in US equity prices. Until then the bar for QE3 remains high and the Fed will likely limit its policy moves to less controversial methods such as increasing the size of its balance sheet or extending the maturities of the US Treasuries the Fed holds. Read more forex trading news on our forex blog. |
| US Consumer Prices and Spending Steady in August Posted: 29 Aug 2011 06:33 AM PDT
Expectations for consumer data in August were for only mild growth in spending and income levels among consumers. The monthly percent change in personal income held steady near the forecast 0.3%, but spending levels surged an unexpected 0.8%. This data outpaced last month's adjusted contraction of 0.1% in the same indicator. The reports, issued by the US Bureau of Economic Analysis, represent stability in consumer prices in the American economy. The Core Personal Consumer Expenditures (PCE) CPI reading also revealed stability as it came in at the forecast level of 0.2% growth. Though markets anticipate a downturn, price increases appear to be holding steady relative to consumer income. Read more forex trading news on our forex blog. |
| Australian New Home Sales Down 8% Posted: 29 Aug 2011 06:29 AM PDT
A monthly report on new home sales in Australia revealed a continuation of July's dismal housing figures from the Outback economy. The Housing Industry Association (HIA) published this month's reading with no expectations priced in, as is typical, and underscored the bearish 8% contraction in new home sales. The report measures the monthly change in sales of only those homes recently constructed, not those already existing. The demand for newly built houses has declined in Australia consistently since May of this year, when it only experienced 0.2% growth. The Aussie has been falling under heavy pressure lately and this housing data will likely continue to push it further bearish. Read more forex trading news on our forex blog. |
| German Prices in Minor Contraction Posted: 29 Aug 2011 06:24 AM PDT
Preliminary data out of Germany this morning showed a possible contraction in consumer prices as they are measured by the Consumer Price Index (CPI). Expectations were not terribly high to begin with for this reading, but a turnout of negative 0.1% may push traders out of the risk-taking sentiment they had adopted last Friday. The last time German prices turned bearish was in late-January 2011 amid a broad spike in EUR values. Fundamentals out of the euro zone have painted a rather ominous picture, though the EUR did see an upswing last Friday and this morning. Will this data offset those gains? Read more forex trading news on our forex blog. |
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