Waiting For The FED

Published by Filipe R. Costa on Thu, 13/09/2012 - 10:04
qe3

Daily Market Commentary for September 13: Yesterday some good news came to the market as the German Constitutional Court approved the country contribution to the European Stability Mechanism - the bailout fund. Today we will see increased volatility as the Federal Reserve will announce decisions from its FOMC meeting.

All eyes will be centred on the FED decision as investors are waiting for new and fresh bond-buying announcements. Expectations are for QE3 to be delivered today and it will be interesting to see what exactly the FED has in hand. The latest Ben Bernanke speeches have been pointing into QE3 or some kind of asset purchases program but it is unusual for the FED to intervene when the equity market is flying high as is the case. With the S&P registering its high since December 2007, it is difficult to justify the intervention and the benefits from it may be very limited. But Bernanke is concerned with the fiscal cliff and may want to put is fingers at work before it is to close to the US election. Later today we will see what will happen. For now, most spread bettors are opposing the bullish market and have been shorting the FTSE and other indices, believing the FED will disappoint again or may it be just a case of buy the rumour sell the news.

No matter what the FED decides, volatility is likely to pick up. Spread bettors should reduce exposure to the market during the day to avoid been caught with a margin call.

Name Last price Close Price % 5-Day % YTD %
DAX (Xetra) 12/09/2012 7343.53 0.46 5.44 24.50
Nasdaq 100 Index 12/09/2012 2791.68 0.24 0.89 22.56
S&P 500 12/09/2012 1436.56 0.21 2.36 14.23
Euronext 100 12/09/2012 668.78 0.04 2.72 12.81
CAC 40 12/09/2012 3543.79 0.18 4.05 12.15
Gold (LBM) $ 12/09/2012 173220 -0.06 2.24 10.55
Dow Jones Industrial Average 12/09/2012 13333.4 0.08 2.19 9.13
Crude oil (Brent) Composite 12/09/2012 11494 0.64 1.93 7.01
Nikkei 225 12/09/2012 8960 1.73 3.23 5.97
FTSE 100 12/09/2012 5782.08 -0.17 2.20 3.77
AUD/JPY - JPY per Australian $ 12/09/2012 81.41 0.39 1.87 3.73
GBP/USD - US $ per £ 12/09/2012 1.6106 0.21 1.28 3.71
AUD/USD - US$ per Australian $ 12/09/2012 1.0461 0.31 2.66 2.49
USD/CHF - Swiss Fr per US$ 12/09/2012 0.9372 -0.23 -1.93 -0.04
EUR/USD - US$ per Euro 12/09/2012 1.2903 0.40 2.40 -0.39
EUR/CHF - Swiss Fr per Euro 12/09/2012 1.2091 0.18 0.42 -0.49
Crude oil (Light Sweet) Composite 12/09/2012 9695 0.18 1.24 -2.07
EUR/GBP - £ per Euro 12/09/2012 0.8012 0.20 1.12 -3.84