MORNING BRIEFING: Publication of minutes of FED’s last meeting

[RTFX-Trading]

MORNING BRIEFING:  Publication of minutes of FED’s last meeting

What’s new:
United States: The Fed revises its forecasts for GDP 2010 upward
United States: FED Positive views on U.S. economy evolution
United States: The Fed is considering sales of bonds
IMF: Upcoming gold sales
Japan: BOJ keeps interest rates unchanged
Euro area: European political support first, dixit Mr. Papandreou
Australia: AUD under pressure after the announcement of the IMF

Today:


Rates in Asia and Indices:
EURUSD: 1.3613 - 1.3557.
USDCHF: 1.0812 - 1.0772.
GBPUSD: 1.5687 - 1.5641.
EURJPY: 124.16 - 123.31.
USDJPY: 91.28 - 90.83.
DowJones: 10'309.24 +0.39%
NASDAQ: 2'226.29 +0.55%  
S & P 500: 1'099.51 +0.42%
Nikkei: 10'335.69 +0.28%
Shanghai: Closed
Gold: $ 1'104.10
Crude Oil: $ 75.91
 
Comments:
In the publication of its last meeting’s minutes, the U.S. Federal Reserve is reviewing its forecasts for GDP in 2010 from 2.5% - 3.5% to 2.8% - 3.5%, while leaving its forecast for 2011 unchanged at 3.4% - 4.5%. The unemployment rate is reviewed from 9.3% - 9.7% to 9.5% - 9.7% while the inflation rate was revised slightly upward from 1.3% - 1.6 % to 1.4% - 1.7%. The market seems more focusing on a better prevision for GDP, and buying of the USD, which gained ground last night.

In the same minutes the Fed showed certain optimism about the U.S. economy evolution. But some divisions seem to exist between some of its members, to keep interest rates at their current level gained a majority of votes.

The Federal Reserve also plans to sell part of its obligations, bonds issued after the housing crisis that hit the U.S. last year.

The more favorable outlook on the U.S. economy added to the uncertainties still present on the European situation continue to weigh on the EUR.

The International Monetary Fund (IMF) yesterday announced its program of gold sales, for a total of 191.3 tons, program which has weighed on the price of gold, coming down from an all time high against the EUR.

Unsurprisingly, the BoJ (Bank of Japan Central) kept interest rates unchanged, underscoring its commitment to fight deflation, while the Nikkei finished up slightly. The JPY is supported mainly by Japanese exporters, sellers of USDJPY among other currencies.

According to Greek Prime Minister Papandreou, Greece need political support from Europe, but does not want money from European taxpayers.

The Australian Dollar (Australia fourth largest producer of gold) lost ground after the announcement by the IMF of its planned gold sales, although it should be spread over time, as well as the New Zealand Dollar which recorded the largest drop yesterday from our basket of currencies.

Good day

Pascal Bovay

RTFX Ltd
Trading desk
RTFX Ltd is licensed to conduct investment services business by the Malta Financial Services Authority. This information does not constitute an offer or solicitation and is provided for information purposes only. This information shall not be deemed to constitute advice and should not be relied on as such to enter into a transaction or for any investment decision. Any opinions expressed in this document represent the views of RTFX Ltd at the time of preparation. They are thus subject to change without notice. RTFX Ltd believes that the information contained herein is accurate as at the date of publication. However, no warranty of accuracy is given by RTFX Ltd and no liability in respect of any errors or omissions, including any third party liability, are accepted by RTFX Ltd or any director, officer or employees.