New York:
May 18 5:10 | London:
May 18 10:10 | Tokyo:
May 18 18:10
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US Market Update TRADETHENEWS.COM STAFF
Markets Await Helicopter Ben
Economic Data
- (RU) Russia Central Bank (CBR) raised its key rates by 25bps (not expected) with the Refinancing Rate going to 8.25%
- (US) Sept RBC Consumer Outlook: 50.4 v 46.4 prior
- (PL) Poland Aug CPI M/M: -0.3% v -0.3%e; Y/Y: 3.8% v 3.8%e
- (BR) Brazil July Retail Sales M/M: 1.4% v 1.0%e; Y/Y: 7.1% v 7.0%e; Broad Retail Sales Y/Y: 10.2% v 10.7%e
- (US) Aug Producer Price Index M/M: 1.7% v 1.2%e; Y/Y: 2.0% v 1.6%e
- (US) Aug PPI Ex Food & Energy M/M: 0.2% v 0.2%e; Y/Y: 2.52.6%e
- (US) Initial Jobless Claims: 382K v 370Ke; Continuing Claims: 3.283 v 3.318Me
- (CA) Canada Q2 Capacity Utilization Rate: 81.0% v 81.1%e
- (CA) Canada July New Housing Price Index M/M: 0.1% v 0.1%e; Y/Y: 2.3% v 2.3%e
- (US) EIA Natural Gas Inventories: +27 BCF v +24-29 bcf expected range
- Equity trading has been choppy this morning ahead of the FOMC decision and press conference as traders await word on Chairman Bernanke's plans. Few analysts doubt that some sort of easing will be announced, although there is little consensus about what might be in the offing. On the one hand, some say the Fed will restrict itself to more "verbal easing," with no further asset purchases launched. Others see a possible extension or modification of Operation Twist. Many are calling for a new bond-buying program with big numbers and fixed completion dates, possibly involving mortgage asset buying. Some expect the Fed to signal it is committed to an easy money policy until the economy meets set benchmarks for improvement. In Europe, Greece has been a focus after an IMF official asserted that Athens would require a third bailout, which was met by denials from IMF higher-ups and the Greek finance minister. Front-month WTI crude took out the $98 handle earlier as traders react to unrest in the Middle East and anticipate Fed action.
- Shares of Pall are up nearly 8% this morning after the firm roundly topped earnings and revenue expectations in its Q4 report, on a solid gain y/y in gross margins. Education firm K12 is up nearly 7% thanks to a strong earnings report. Pier 1 Imports is flat on the session after the firm's Q2 results were right in line with expectations. Share of server hosting firm Equinix shot up more than 12% on news that it has set the date and terms of its expected REIT conversion this morning. EQIX drifted lower to +10% in mid morning trade.
- The proposed merger of BAE Systems and EADS, which would create an aerospace and defense giant second only to Boeing, has not been welcomed with open arms by shareholders. Shares of BAE and EADS fell sharply in European trading thanks to worries about whether the deal will be able to clear regulatory hurdles. Note that talk about merging the two firms has been ongoing for years.
- Price action in the greenback was mixed during the New York session as traders squared their positions ahead of the FOMC announcement. The yen currency maintained a firm tone before the upcoming Japanese fiscal-half-year end. EUR/USD drifted back below the 1.29 handle on the Greece news.
Looking Ahead
- (MX) G20 Finance Ministers and Central Bankers meet in Mexico City
- 11:00 (DE) German Chancellor Merkel
- 11:00 (US) 10-year TIPS refunding announcement
- 11:30 (ES) Spain to publish Autonomous Region budget data
- 12:00 (IC) Iceland Aug International Reserves (ISK): No est v 830B prior
- 12:30 (US) FOMC Rate Decision: Expected to leave interest rates unchanged at 0.25%
- 13:00 (US) Treasury to sell $13B in 30-year bonds
- 14:00 (US) FOMC to release projections of Economy and Fed Funds Rate
- 14:15 (US) Fed Chairman Bernanke holds Press Conference
- 14:00 (US) Aug Monthly Budget Statement: -$160.0Be v -$134.1B prior
- 17:00 (CL) Chile Central Bank Interest Rate Decision: Expected to leave the Nominal Overnight Rate Target unchanged at 5.00%
- 17:00 (CO) Colombia July Trade Balance: +$200.0Me v -$190.9M prior; Imports CIF: No est v $5.1B prior
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