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Forex · News · USMarket

NEWS / USMarket

USmarket Expecting results of FRS meeting on rates investors do not hurry with opening of positions

11:47 05/10/2006

Expecting decisions about rates, which will be announced today after FOMC meeting at 18:15 GMT, the American shares on Wall Street began trading session on Tuesday with small decrease.

 

Let's remind that the majority of experts assume that the federal funds rate will be raised 0.25 % up to a level of 5.00 % that will be already the sixteenth increase of the rate in the USA since June, 30th, 2004.

However investors are more interested in comments of FOMC members in the final instruction from the point of view of its further steps of the rate change.

 

We shall remind again that any hints that Fed will make "pause" in a cycle of interest rates increase will support the stock indexes. And on the contrary, rigid tone of the statement can lead the stock market to a long-felt correction.

 

While, as experts’ opinions divided key share indexes continue to trade in a narrow sideways range as S&P 500 index or show the minimal growth as Dow-Jones index during three last trading sessions.

 

Investors’ indecision is also caused by uncertainty of a situation in energy market. We shall remind that oil quotations in last sessions have planned descending correction. In opinion of technical analysts oil prices already in the near future can test a level $68.70 where there is a line of a trend since April, 27th which also coincides with 55-day's moving average.

Daytime oscillators, which assume the further drop and are much more above levels extreme oversale, not excepting probability of continuation of descending correction, have also mentioned it.

As a result technical analysts indicate opportunity of falling of oil quotations to 100-day's "moving" on $66.70, and further to 200-day's moving average at a level $65.30.

 

It is necessary to notice that wholesale inventories index for March, published yesterday, which was considerably below the expected level, could not influence significantly on the market.

Let's remind that value of the indicator made +0.2 %, at the forecast of +0.5 %. And the previous value is revised from +0.8 % up to +0.9 %.

 

Except for results of FOMC meeting today the market’s participants will pay attention to the publication of value of the federal budget in the USA for April at 18:00 GMT. We shall remind that the forecast is equal to +80.0 billion dollars, and the previous value was equaled -85.5 billion dollars.

As a result Dow-Jones index of New York stock exchange was up 55.23 points and was closed at a level 11639.77. NASDAQ index was down 6.74 points and is at a level 2338.25. S&P 500 index rose 0.48 point and is at a level 1325.14.

And 30-years US Treasury notes’ yield grew 0.012 in comparison with the previous closing and makes 5.198.

 

While it is recommended, being outside the market, to wait  for descending correction of key share indexes. After realization of this correction there is possible a purchase of futures for Dow-Jones and S&P 500 indexes.

 

 

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