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Forex · News · USMarket

NEWS / USMarket

USmarket Investors are not active before US FRS Head Bernanke’s testimony

11:47 02/14/2006

From the beginning of trading week, on a background of uncertainty concerning FRS further policy shares on Wall Street opened in a minus.

Let's remind that investors expect the speech of the new head of Ce3ntral Bank Bernanke this week. Investors hope that Bernanke will let know that FRS is not going to finish process of rates rise the nearest months during increase of rates.

Bernanke’s testimony takes place on Wednesday and Thursday and tomorrow's report is considered as the most important event of this week. Therefore the market does not hurry up with decision-making and, in opinion of the majority of analysts till this moment strong fluctuations in the market are unlikely.

As after retirement the US FRS former head Alan Greenspan spoke on the subject of prospects of the American economy very optimistically the majority of the market’s players expect that Bernanke will hold moderate-firm line.

The positive mood of investors is sustained by the drop in oil prices, which proceeded on Monday. It means that the spring comes, and investors are sure that with the beginning of warming of problems with deliveries will not arise. Iranian nuclear program is of no interest for the market now.

As a result yesterday March futures for oil WTI were down 60 cents to $61.24 per a barrel, and during the tenders the quotation fell up to a minimum of $60.85 since January, 3rd.

The results of G8 meeting did not become unexpected and almost did not affect quotations of currencies. We shall remind that Ministers of Finance expect preservation of high rates of economic growth this year, and they called for levelling of economic misbalances.

Another important question of G8 meeting was a problem of debt amortization of the poorest countries. G8 representatives supported activization of liberalization process of world trade within the limits of WTO.

Risks for world economy are high and unstable prices for energy carriers. The text of the communique emphasized that "to improve functioning of the markets and increase their stability we have agreed to strengthen work on dialogue consolidation in sphere of energy policy between manufacturers and consumers".

 

It is remarkable that last economic data give an occasion to think of that investors began to wait for end of a cycle of rates increase of a little bit prematurely. So, expert Andre Bakhos from Princeton Financial Group. notices that "last data give promise that what experts considered as the end of rates increase, is not the end".

As a result Dow-Jones index of New York stock exchange has fallen on 26.73 points and was closed at a level 10892.32. NASDAQ index has dipped on 22.07 points and is at a level 2239.81. S&P 500 index has dropped on 4.13 points and is at a level 1262.86.

Profitability of the US state obligations for 30 years has grown on 0.012 in comparison with the previous closing and makes 4.559.

As a result all our previous recommendations hold good: purchases of Dow-Jones index futures should be still kept. The purposes of growth of the index are the former.

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