MORNING BRIEFING: The Fed expects the U.S. economy has passed the bottom, investors buying high-yielders.

[RTFX-Trading]

MORNING BRIEFING: The Fed expects the U.S. economy has passed the bottom, investors buying high-yielders.

What's new:
United States: rates unchanged as expected.
United States: budget deficit record of $ 181Mrds in July.
USA-Switzerland: Agreement between the U.S. and UBS in tax evasion.
United States: home prices still falling in urban areas.
United States: the trade deficit widened to $ 27.01Mrds in June.
England: King said that inflation will be less than 2% in two years.
England: ILO unemployment rate in three months at the highest since 1996.
France: GDP growth in 2nd quarter and lowered inflation to -0.70% in July.
Euro zone: decline of industrial production of 0.60% in June

Today:


Rates in Asia and Indices:
EURUSD: 1.4248 - 1.4181.
USDCHF: 1.0792 - 1.0746.
GBPUSD: 1.6559 - 1.6476.
EURJPY: 137.13 - 136.18.
USDJPY: 96.26 - 95.80.
DowJones: 9'361 +1.30%.
NASDAQ: +1.47% 1'998.
S & P 500: 1'005 +1.15%.
Nikkei: 10'540 +1.01%.
GOLD: $ 946.20.
Oil: $ 69.48.

Comments:

Last night at 20:15, the Federal Reserve as expected kept its rate unchanged at 0.25%. The FED was cautiously optimistic on economic activity in the United States, while extending the duration of its program to buy long term govt securities. The "carry trades" are being requested, the Fed said that the U.S. economy has passed the trough of the wave.

Difficult to predict the evolution of the greenback following the meeting: "normally" the U.S. dollar advancing when macroeconomic news is good, however since the beginning of the year, it was rather the opposite, investors flock to the U.S. currency who is considered a safe haven when the statistics are worse and away when the statistics are better. My personal preference is for a lower U.S. dollar, expecting investors to buy risky assets and high-yielders.

Nice day.

Nicolas Longchamp
RTFX Ltd
Head Office
The Cornerstone Complex, 16th September Square | Mosta MST 1180 | Malta
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