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Forex · News · Forex ForecastsNEWS / Forex Forecasts |
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US market…FOMC members are not losing optimism despite Friday data.
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05:48 08/11/2004
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US market…FOMC members are not losing optimism despite Friday data.
The Federal Open Market Committee of the Federal Reserve System of the U.S. made a decision to raise Federal funds rate 0,25% to the level of 1,50%.
On Tuesday, the U.S. stock exchange market made an attempt to repair recent losses for the first time since Friday disappointing review. Attention of the market players is concentrated on the summing up comments of the FOMC members.
The difference between the recent optimistic statements of the FRS chairman Alan Greenspan, that he made in Congress, and Friday Labor market review was very mush great. For the investors, the determining phrases of the FOMC members’ communiqu? will be extremely important now, as they will reflect the evaluation of labor market figures for the last two months.
As a result, the final communiqu? of the FOMC meeting reads “ The Committee believes that, even after this action, the stance of monetary policy remains accommodative”.
The FOMC pointed at the importance of keeping price stability but reminded once again that in case current economic parameters changed, the operative reaction would follow.
As for labor market situation, the Fed thinks that this year’s strengthening of inflationary pressure is caused by structural factors and decline in employment is due to overall economic growth slow down. Moreover, the FOMC members think that the slow down is caused, first of all, by fuel and energy prices’ pressure. In the end, optimistic assurances that economy was capable of restarting growth at a higher than earlier pace were expressed.
Earlier in a day, data on labor productivity in the U.S. was published. Preliminary value of labor productivity index in the second quarter in the U.S. equaled +2.9%, the forecast was +2.1%, previous value was revised from +3.8% to +3.7%.
Recommendations: we still assume further decline of base stock exchange indexes and that is why recommend keeping futures selling from the levels, pointed in our yesterday recommendations. Targets of decline remain the same. Our forecast can be annulled only by index quotations’ rise higher than 10100 for Dow Jones and 1100 for S&P500.
Recommendations: we still assume further decline of base stock exchange indexes and that is why recommend keeping futures selling from the levels, pointed in our yesterday recommendations. Targets of decline remain the same. Our forecast can be annulled only by index quotations’ rise higher than 10100 for Dow Jones and 1100 for S&P500.
The forecast was created by trans1.
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