iPoint (iPoint.cz)
Czech markets  |  June 20, 2012 09:07:31

Equity outlook 6.20: What to expect from today's speech the Fed?


The day before the Fed meeting of the global financial markets washed optimism. Investors are betting on the continuation of rescue in the form of loose monetary policy. Due to the increase in equity markets since the beginning of June but it seems to be a significant part of these expectations is already included in rates and market reactions to any further QE would be a milder form. Fed Governor Ben Bernanke in his recent speeches have repeatedly announced that intervenes when inflation is below 2% and at the same time the economy hits a significant slowdown. This would be roughly the same current state because byla CPI inflation in May and 1.7% while the unemployment rate in the U.S. declined in recent months, you have the Bernanke only be a temporary phenomenon. In recent comments, members expressed about the future FOMC easing of monetary policy generally positive.The game could thus be an extension of Operation Twist, another QE, or both together. Another series of QE would obviously be more favorable impact on financial markets than just extend Operation Twist, because that in itself does not increase the monetary base and thus the money supply. The actual effect of Twist is especially costly in the long-term financing of government debt and increase the attractiveness of stocks to bonds. The impact on the exchange rate is negligible compared to QE in its pure form (ie, buying government bonds). If only there to extend Operation Twist, you can even expect a negative market reaction, as the growth rate of the last days Eurodollars suggested more expectations of further QE. In the case of the most favorable scenario, which is the extension of Twist and concomitant QE, the stock markets could temporarily strengthen up abruptly.This option, however, in our opinion less likely due to the fact that stock markets in the U.S. are close to their highs of several years ...

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Akciový výhled 20.6.: Co očekávat od dnešního vystoupení Fedu?

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