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February 2012
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Archive for the Interest Rates Category

Federal Reserve To Release Forecasts -

The Federal Reserve has announced that they will release their forecasts for the Federal funds rate.  The move will increase transparency at the Federal Reserve at may help with financial planning for businesses and investors.  Monetary policy expectations should be released at the next meeting on January 24th and 25th.  The Fed funds rate is expected to remain low for the remainder of 2012.

To read a related Bloomberg article, please click here:

http://www.bloomberg.com/news/2012-01-03/fed-officials-will-make-public-own-forecasts-for-key-rate-at-next-meeting.html

James Sutliff

Economic Data Drives Oil Higher -

Economic data sent oil prices higher in trading on Tuesday.  Housing starts and building permits rose and data from Europe looked strong.  Also, supplies of crude oil fell 4.6 million barrels last week which was higher than analyst expectations.

To read a related Reuters article, please click here:

http://www.reuters.com/article/2011/12/20/us-markets-oil-idUSTRE7AD06820111220

Jim Sutliff

Fitch May Downgrade France -

Fitch Ratings indicated that they may downgrade the sovereign debt of seven European nations.  France is one of the European nations facing a downgrade from Fitch.  The six other nations are Belgium, Cyprus, Ireland, Italy, Slovenia, and Spain.

To read a related Bloomberg article, please click here:

http://www.bloomberg.com/news/2011-12-16/euro-advances-as-juncker-signals-eu-to-meet-imf-loan-deadline-yen-falls.html

James Sutliff

Bernanke Meets With Republican Senators -

On Wednesday, Federal Reserve Chairman Ben Bernanke met with Republican Senators to discuss the European Union sovereign debt crisis.  According to GOP Senators, Bernanke indicated that the European debt crisis could significantly impact the American economy.  The Euro fell below $1.30 in afternoon trading.

To read a related CNN Money article, please click here:

http://money.cnn.com/2011/12/14/news/economy/bernanke_europe_senate_gop/index.htm

Jim Sutliff

Euro Trades Lower -

 The Euro fell on news that Moody’s is considering a downgrade of European Union sovereign debt.  The inability to end the debt crisis is one factor in the Moody’s decision.  In currency trading, the Euro fell to $1.3184 which is the lowest mark since October 4th.  Also, Italian bonds declined in trading.

To read a related Bloomberg article, please click here:

http://www.bloomberg.com/news/2011-12-11/euro-weakens-before-german-investor-confidence-data-italy-s-bill-auction.html

James Sutliff

Asia Markets Fall; Gold Rises -

Stock markets across Asia fell with Japan’s Nikkei dropping 1.6% and Korea’s Kospi Composite falling 1.9%.  New Zealand and Australian markets were also lower in trading.  European debt crisis concerns were the driving force in the markets.  The Euro fell to $1.3345 against the Dollar and gold rose $7.40 to $1,713.20 an ounce.

To read a related Wall Street Journal article, please click here:

http://online.wsj.com/article/SB10001424052970203413304577087082679599936.html?mod=WSJ_hp_LEFTWhatsNewsCollection

James Sutliff

Federal Reserve QE3 -

The Federal Reserve may provide another round of quantitative easing.  The breakdown of the budget negotiations between Republicans and Democrats are one factor that could lead to QE3.  Quantitative easing may lower long term interest rates and help with the recovery of the housing market.

To read a related Fox Business article, please click here:

http://www.foxbusiness.com/politics/2011/11/23/washington-gridlock-could-push-fed-to-act-on-economy-with-qe3/

James Sutliff

Euro Falls On Debt Yields -

Yields for European sovereign debt continue to drive the Euro lower in trading.  The Euro fell against most major currencies and settled at $1.3525.  In trading against the Yen, the Euro fell to 104 Yen and had the biggest weekly drop since late September.  Cross currency rates improved slightly for the Euro against the New Zealand Kiwi and the South African Rand.

To read a related Bloomberg article, please click here:

http://www.bloomberg.com/news/2011-11-19/euro-loses-most-against-yen-since-september-as-debt-yields-surge-in-crisis.html#

Jim Sutliff

Smaller Euro Zone -

The Euro zone debt crisis continues to spread and yields on Italian debt broke the 7% mark today.  As a result, the Dow Jones Industrial Average fell almost 400 points in trading on Wednesday.  Speculation of a smaller Euro zone with deeper integration has increased over the last week.  In a recent speech, French President Nicholas Sarkozy mentioned a two-speed Euro zone which would be smaller than the current European Union.

To read a related Reuters article, please click here:

http://www.reuters.com/article/2011/11/09/us-eurozone-future-sarkozy-idUSTRE7A85VV20111109

James Sutliff

Italian Bonds Force Stock Futures Lower -

Stock futures are lower as traders focus on Italian bonds.  Bond yields for Italian debt have climbed and Berlusconi may step down as Prime Minister.   The 10 year Italian government bond yield rose to 6.58%.  The Dow Jones Industrial Average closed at almost 12,000 on Friday.

To read a related MarketWatch article, please click here:

http://www.marketwatch.com/story/us-stock-futures-sink-on-italy-worries-2011-11-07?dist=beforebell

Jim Sutliff

Economic News Sends Gold Higher -

Gold broke the $1,760 an ounce mark in trading this week.  The precious metal rose on the possibility of slower domestic economic growth and another round of monetary stimulus.  Recently, Federal Reserve Chairman Ben Bernanke indicated that additional monetary stimulus may be in the works to lower unemployment.  The lingering European debt crisis is also increasing demand for gold.

To read a related Bloomberg article, please click here:

http://www.bloomberg.com/news/2011-11-04/gold-traders-more-bullish-as-debt-crisis-u-s-economy-spur-bets-on-gains.html

James Sutliff

Greek Referendum Sends Stocks Lower -

The Dow Jones started to rebound after falling more than 300 points.  Stocks fell after Greek Prime Minister George Papandreou called for a referendum on the European Union bailout plan.  Currently, the Dow Jones is down slighlty less than 200 points in afternoon trading.

To read a related Reuters article, please click here:

http://www.reuters.com/article/2011/11/01/us-markets-stocks-idUSTRE7A01NM20111101

Jim Sutliff

IMF Plan Opposed -

The United States opposed a plan to almost double the size of the International Monetary Fund.  Currently, the fund has $380 billion in resources.  Shareholders opposed to the plan included Japan, China, Germany, Canada, and Australia.

To read a related Reuters article, please click here:

http://www.reuters.com/article/2011/10/14/us-g-idUSTRE79C74G20111014

Jim Sutliff

Treasuries Fall On Jobs Data -

Treasury yields rose for the fourth straight day after a government jobs report indicated that the economy added more jobs in September.  Ten year notes increased to 2.06% near the end of the trading day.  Yields had fallen to their lowest mark on September 23rd at slightly above 1.67%. 

To read a related Bloomberg article, please click here:

http://www.bloomberg.com/news/2011-10-07/treasuries-fall-as-u-s-economy-added-more-jobs-last-month-than-forecast.html

Jim Sutliff

Federal Reserve Set To Purchase Debt -

The Federal Reserve announced that it would sell $400 billion of short term debt and purchase longer term bonds with the funds.  In addition, the Federal Reserve stated that there were significant downside risks to the economic outlook.  The warning sent stocks lower with the S & P 500 closing down 3% for the trading day.

To read a related Reuters article, please click here:

http://www.reuters.com/article/2011/09/21/us-usa-fed-idUSTRE78J3HB20110921

James Sutliff