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发表于 2012-3-14 09:12 AM
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Good Morning! Yesterday started off well for the United States when retail sales increased by the largest margin in five months. And, at 2:15 PM the Federal Reserve Bank shifted from its previous doom and gloom stance to one that appears to be more realistic. Although keeping additional (QE) easing on the table and keeping the benchmark interest rate target at zero to 0.25% the central bank improved the language from previous communiqués to read that it expects “moderate economic growth” (rather than modest) and unemployment “will decline gradually” (rather than will decline only gradually).
Raising their assessment of the US economy the Fed said, “The unemployment rate has declined notably in recent months but remains elevated.” They also said, “Strains in global financial markets have eased, though they continue to pose significant downside risks to the economic outlook.” We can’t say that the US central bank is “Hawkish” but they do seem to be becoming less “Dovish.” It would seem that we will need to see the economy hit another soft patch before any further QE would be warranted. We saw Stocks and Treasury yields move higher and the US Dollar strengthen after the announcement.
This improved outlook for US economic growth sent the Dow Jones Industrial Average toward its highest closing level since 2007. Chairman Bernanke’s acknowledgement of an improved economic path is sending Treasury yield climbing as many begin to anticipate that the central bank will not be unable to wait until late 2014 to begin to tighten. And the US Dollar is being supported on higher Treasury yields and a more positive outlook for the economy. When so many other countries look to be headed into another recession, should the US economy continue to show growth progress it will not only be US Dollar supportive but also positive news for the global economy as a whole.
In another statement yesterday the Federal Reserve said that 15 of 19 US banks would be able to maintain capital levels above a regulatory minimum in an “extremely adverse” economic scenario, even while continuing to pay dividends and repurchasing stock. It was mistakenly reported yesterday that Citigroup, the third largest U.S. bank by assets, failed the stress tests but it has been confirmed that they did indeed pass the test. However,the Fed indicated that the bank would fall short of some capital requirements if it boosted the payouts. The Federal Reserve rejected the bank’s request to raise its dividend and expand its buyback thus setting back efforts by the money centerbank to restore investor confidence. The fact of the matter is that most of the largest US financial institutions can withstand a recession more severe than the last one with their fortress like balance sheets. As one commentator indicated, any bank that can remain adequately capitalized under the acute stress scenarios is not just strong but probably “impregnable.” This cannot be said about European banks. The Japanese Yen fell to an 11 month low against the US Dollar as the widening yield spread betweenthe United State and Japan attracted investors into Dollar based assets and away from lower yielding currencies. We saw the Chinese Yuan soften after Chinese Premier Wen Jiabao said that the exchange rate may be near equilibrium and is likely to see more and larger two-way fluctuations.
Both the Australian and New Zealand Dollars are higher against the Yen. The Aussie Dollar traded near a 10 month high against the Yen as higher commodity prices increased prospects for greater export earnings. Kiwi traded near a seven month high against the Yen as Asian stocks followed the Dow, extending a global rally, which supported the purchase of riskier assets. |
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狗仔卡
发表于 2012-3-14 01:03 AM
