Today Mario Draghi had to fight with the same rush of the investors that Ben Bernanke encountered yesterday. Everybody was interested in any major change that could happen in the short term, like the possibility of modifying the interest rate. As just last month was announced that they would maintained the low interest rate for an “extended period of time” it’s logical that no important changes were expected today, especially because the economy didn’t report major changes (like the inflation … [Read more...]
What Did FOMC Decide?
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FOMC announced to keep the interest rate at 0.25% and not much information about the QE3. The program is maintained at the previous parameters with no given data for an eventual tapering. On the other side, the inflation becomes an alarming issue as “persistently below its 2% objective could pose risks to economic performance”. In this regard, and taking in consideration the continuation of the monetary stimulus program, economists are expecting the core inflation to rich 2% in the medium … [Read more...]
Obama Gives Hope to the Middle Class
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President Obama expressed his satisfaction regarding the evolution of the American economy and highlighted the importance of the wellness of the middle class in order to have the economy running at optimal parameters. Also, the creation of jobs represents the main concern, giving the fact that creating jobs is the nucleus of the American economy. If Americans work hard, every field of the economy will run smoothly. In order to rich this point, reforms are needed and consumers need to understand … [Read more...]
Japan May Face a Small Obstacle
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Starting with April this year the QQE program (quantitative and qualitative monetary easing) has been launched. Through this program, the Government is increasing annually the monetary basis by 60-70 trillion yen. The quantitative aspect is determined by the great amount of JGBs bought monthly while the qualitative aspect is represented by increasing average remaining maturity of the Bank's JGB purchases to about 7 years. Positive effects have been observed in terms of stocks (whose prices … [Read more...]
Any Movement is Tied to the Economy
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As I mentioned in my early statement, Ben Bernanke didn’t manage to really impress the markets neither yesterday nor today. Maybe the only factor that would make a difference is the fact that yesterday the chairman of Fed made it clear that is very flexible in taking decisions while today his attitude may have shift more towards a dovish one, with the promise that even if by the end of next year the QE3 will be ended, the Fed will keep its policy highly accommodative. The manufacturing in … [Read more...]
FED, Took No Decision Today
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Ben Bernanke had a very clean speech, emphasizing all the possible scenarios and the correspondent solutions. He didn’t said that the QE3 is going to be ended at a certain point for sure but neither he said that QE3 will continue for an undetermined period. The key factors of this equation are the signals of the American economy, especially the labor market and inflation. Lately, the U.S. enjoyed positive results and the rising star that lead to such positive news is the housing market. As … [Read more...]
Why Ending QE3?
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The Federal Reserve received today encouraging signals from the U.S. economy. The Consumer Price Index indicated a rise (0.5%) in the price of goods, mainly sustained by the higher cost of gasoline, fact confirmed by the Core Consumer Prices Index that was reported in line with expectations at 0.2% (the last index excludes the energy and food’s costs). It is important to see the inflation being kept under control but on the other side, low values of the index of prices are not much help for the … [Read more...]
The Arabic World, Nuclear Discussions?
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One month ago, Hassan Rowhani was elected president in Iran raising hopes for the beginning of a more stable and peaceful period. A clarification concerning the nuclear dispute with the West represented one of the main expectations. Today, Iran comes again to the attention of the world, being suspected about never interrupting its nuclear program, even more, developing it at considerable proportions. The doubts were given by the weak collaboration of Iran with IAEA (International Atomic Energy … [Read more...]
Should We Believe in Japan’s Recovery?
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The press conference of Bank of Japan announced its optimistic view concerning the next 2 years period. In this matter, the latest data about Japan came better, together with the successful implemented quantitative easing, promise to keep Japan safe. Thereby, an increase in exports and public investments along with a moderate increasing in industrial production and accommodative financial conditions have great potential to lead in maximum 2 years to the targeted 2% inflation. The monetary … [Read more...]
Australia, Negative Outlook
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Mining (down 15 to -28 points), retail (down 17 to -28 points) and manufacturing (down 13 to -27 points), one by one the most important sectors of activity in Australia are ceasing to work at previous standards. Thus, the business conditions went back to low levels from May 2009. The overall outlook is disappointing: weak employment conditions, decreasing demand, falling prices, low interest rates and a falling Australian dollar. These weaknesses may be explained by the global weaker conditions … [Read more...]
Europe Is Still Struggling
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In his speech today, Mario Draghi maintained the structure of his last talk. Constrained by the obvious reality, he had to admit the lent pace of recovery and the long list of problems that are not yet solved, as the weak conditions in the labour market and the economic slowdown. On the other hand, the accommodative position of the monetary policy together with the improvements made since mid-2012 and the banking union system should keep the stability of the euro zone. The heart of Euro zone, … [Read more...]
Euro: On Safe Hands
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The E.U. – U.S. talks concerning the trade agreement are slowed by the France’s reluctance and lack of trust. Greece went back to a fragile position by encountering difficulties with its creditors which are expecting strong evidences for the fulfillment of the established reforms. Besides all this, Portugal holds a deepening political turmoil which lead the country’s bourse to the worst day in the last 2 years and pulled down banking shares. After a “bright” beginning of the week, the … [Read more...]
