The big news of the last two days was yesterday’s FOMC where Fed Chairman Bernanke confirmed the end of QE2. I also felt bad for him as he looked like a child who just was informed that there is no Santa Claus as he lowered the Fed’s growth and GDP forecasts, all but admitting that these extraordinary measures haven’t worked.
In a week that featured seven polite Republicans, Michelle Backmann seems to fare better every day. Mitt Romney is still the frontrunner and several of the Republicans may have self-destructed while others may throw their hat in the ring. The debate was calm and no feathers were ruffled.
While the Republicans had the country’s eye in the New Hampshire Primary Debate, not one hint of specific remedies for the economy or job problem was presented. When all was said and done, the Debate was little more than a bash Obama meeting. These high profile Republicans are terrified of making a definitive statement, which leaves voters nervous that we may soon be returning to Bush era deregulation and economic woes.
The Republican debate was followed by a speech by Federal Reserve Chairman Ben Bernanke on Tuesday. Treasury and the Fed have maintained that budget cuts are definitely needed and that these cuts will be painful for everyone. Bernanke asserted that there is urgency to the current debt ceiling talks that should not be linked to a wave of initial budget cuts.
Bernanke’s greatest fear is that Congress will hesitate to the point that credit agencies and investors will lose faith in the country’s commitment to meet its obligations. The mild mannered Bernanke urged Congress to come together on raising the debt ceiling and put the budget talks aside for the time being.
Republicans are using the debt ceiling issue as leverage for the no increased tax mandate and deep cuts to social programs. Democrats want social programs protected and feel tax increases must be on the table.
Consumer Prices Jump
A disturbing report from the Labor Department indicated that the Consumer Price Index had risen to its highest levels in three years in May. The cost of food and energy rose by 0.3 percent. These increases followed a 0.2 percent rise in April.
Analysts had projected another rise of 0.2 percent in May. The fear is that t
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When you are faced with a difficult financial condition, consult an expert. You may also want to know about people who have experienced similar situations in the past. You can visit some online forums and check solutions. Surely there is a solution for any difficult situation. One of them is non profit debt consolidation. Be sure to explore all debt relief options when looking to get out of a difficult financial situation.
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Trading the News: U.S. Durable Goods Orders
What’s Expected:
Time of release: 06/24/2011 12:30 GMT, 8:30 EST
Primary Pair Impact: EURUSD
Expected: 1.5%
Previous: -3.6%
DailyFX Forecast: 1.0% to 2.5%
Why Is This Event Important:
Orders for U.S. durable goods are projected to increase 1.5% in May, and the rebound in private sector consumption could spark a bullish reaction in the greenback as the outlook for future growth improves. As the Federal Reserve continues to support the economy, private sector activity is expected to gather pace in the second-half of 2011, and the central bank may see scope to start normalizing monetary policy later this year as growth and inflation pick up. H
***Economic Data***
– (FI) Finland May Unemployment Rate: 9.8% v 9.5%e
– (SA) South Africa Apr Leading Indicator: 133.8 v 135.0 prior
– (SZ) Swiss May M3 Money Supply Y/Y: 5.6% v 7.0% prior
– (GR) Greece Apr Current Account: -€2.3B v -€2.6B prior
– (SA) South Africa Q1 Current Account Balance (ZAR): -87.8B v -80.8Be; C/A to GDP ratio: -3.1% v -2.8%e
– (UK) May Public Finances (PSNCR): £11.1B v £6.6Be; Net Borrowings: £15.2B v £16.5B; PSNB ex Interventions: £17.4B v £17.0Be
– (HK) Hong Kong May CPI Y/Y: 5.2% v 5.0%e
– (GE) Germany Jun ZEW Economic Sentiment: -9.0 v -3.0e v; Current Situations: 87.6 v 90.0e
– (EU) Euro Zone Jun ZEW Economic Sentiment: -5.9 v +6.1
– (SZ) Swiss Jun KOF Institute Economic Forecast : Maintains 2011 GDP at 2.8%; Lowers 2012 growth to 1.9% from 2.3% prior
Fixed income:
– (DE) Denmark sold total DKK4.53B in 2014 and 2021 Bonds
– (SP) Spain Debt Agency (Tesoro) sold €2.99B vs. €2.25-3.25B Read more…