SAN FRANCISCO (MarketWatch) — The mere hint of the Federal Reserve’s “tapering,” or a scaling back on the Fed’s bond purchase program, was enough to send utilities stocks lower after Fed’s monetary policy decision on Wednesday. The sector had been one of a handful in the black ahead of the decision. Utilities are considered a safe investment that traditionally pays high dividends and the tapering, in sending bond yields higher, would make the sector less attractive to investors looking to alternatives to bonds. Some of the sector’s largest losers included AES Corp. , down 2.4%, and Southern Co. , off 1.4%. Fed officials held the line on interest rates as expected but said they see less risks to economic growth and to the labor market.
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Car Registrations In the Euro Area decreased to 704 Thousands in May of 2013 from 711 Thousands in April of 2013. Car Registrations In the Euro Area is reported by the European Central Bank. Historically, from 1990 until 2013, Euro Area Car Registrations averaged 896.98 Thousands reaching an all time high of 1130 Thousands in July of 1999 and a record low of 665 Thousands in January of 2013. . This page includes a chart with historical data for Euro Area Car Registrations.
The rate-setting Federal Open Market Committee did not insert any explicit signal about slowing its third round of quantitative easing into the statement
FOREX-Dollar steady as investors seek clarity on Fed policy
Wed Jun 19, 2013 7:23am EDT. * Market awaits signals on Fed's next policy step * Fed expected to keep options open on pace of QE * Dollar index steady, holds above 4-month low By Anirban Nag LONDON, June 19 (Reuters) – The dollar was steady …
2pm ET / 18 GMT – FOMC Statement and Federal Reserve Economic Projections
The Federal Reserve will release its monetary statement 15 minutes earlier this usual to accommodate for the press conference 30 minutes. Expect only minor tweaks to the statement relating to the central bank’s decision to downgrade their growth and inflation forecasts. Unemployment forecasts are expected to remain unchanged. Since GDP and CPI have fallen short of the central bank’s March projections, the Fed will need to adjust their estimates. We expect the central bank to say they continue to see downside risks to the economic outlook. This means their official guidance on interest rates and their asset purchase program will remain unchanged. The Fed will most likely reiterate that they are “prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes.” “Monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens.” While changes to the economic projections could be mildly negative for the U.S. dollar, the FOMC statement is not expected to deliver any surprises.
2:30pm ET / 18:30 GMT – Bernanke Press Conference
Instead the focus will be on Fed Chairman Ben Bernanke’s post monetary policy meeting press conference. There’s been quite a bit of uncertainty relating to how strong his message about tapering will be. Some believe that he will signal that the Fed is close to tapering while others believe that he will downplay their plans to taper, focusing instead on distinguishing the different criteria for tapering versus tightening. The first thing FX traders should look for is whether Bernanke says that tapering will occur “in a few months.” If so, this would be positive for the dollar because it provides a clear timing for changes to monetary policy. If he avoids speculating on a specific time frame, the dollar will most likely suffer and the extent of the losses will depend on how clearly he details the criteria for tapering versus tightening.
Based on the rise in bond yields and the volatility in the Treasury market in general, we don’t expect Bernanke to be kind to the dollar and most likely he will give the market as little as possible because internally, they haven’t decided when the next step should be taken. Since the central bank last met 10 year Treasury yields increased 50bp from 1.63% to 2.2%. The performance of the U.S. economy has also been mixed (see table below). Knowing Bernanke and his inclination to be ambiguous, investors will most likely interpret that to mean that the Fed’s eagerness to adjust asset purchases has weakened.
The following table shows how the economy has changed since May 1st. Overall, consumer spending improved and job growth accelerated but inflation ticked higher on the consumer level and manufacturing plus service sector activity slowed. Housing market activity is also mixed and taken together, these reports show an uneven but continued recovery in the U.S. economy. For the central bank, the pullback in service and manufacturing activity is another reason why Bernanke may want to avoid fueling expectations for Fed tapering and by extension, drive yields even higher.
U.S. stocks are slightly lower this afternoon, as Wall Street takes a breather ahead of the Fed policy statement…(Read More)
Today sees one of the most critical and highly anticipated FOMC days in a long time as we are in the midst of the pivot from an ever accommodative Fed to anticipating a more restrictive one. The only high probability outcome is high volatility. Today’s FOMC meeting is particularly anticipated – and the evidence of this is less clear in the currency market than it is in the short-term interest rate futures market, where the swings have reached very large proportions compared to the moves of the
FXstreet.com (New York) – UBS Strategists, Gareth Berry and Geoffrey Yu take a technical…
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World stocks were trapped in tight ranges as the markets nervously awaited news from the Federal Reserve’s Open Market Committee meeting
FOREX-Dollar falls vs key currencies before Fed announcement
Wed Jun 19, 2013 1:20pm EDT. * Market awaits signals on Fed's next policy move * Fed expected to keep options open on pace of bond buying * Dollar hits lowest since February against major currencies NEW YORK, June 19 (Reuters) – The dollar fell to a …