President Obama and Bernanke, both on the same trading day.
Thursday, February 19, 2009
Economic data was brushed aside during yesterday’s market session as President Obama released his housing plan, while the Fed chairman addressed the public, regarding recent monetary policy trends and the Fed’s economic outlook.
After signing the stimulus package into law, the U.S president released his notes regarding his $75 billion plan for foreclosures and homeowners. According to calculations $75 billion out of the $700 billion will be allocated to borrowers who are forced to take a much larger loan than the current value of their asset. In addition, a percentage of the funds will go to help homeowners and prevent further Economic data published during yesterday’s session only strengthened the president’s statements, as the housing sector failed to show a market bottom, releasing further negative data. Housing Starts fell yet again, showing a figure of 0.47k, much less than what analysts were expecting.
In addition, Federal Reserve Chairman Ben Bernanke gave his meeting minutes regarding the outlook of the U.S economy. The Chairman touched the subject of inflation stating that current monetary actions should not spark inflationary pressures and that their main concern to date is deflation. The Fed reduced yet again their outlook for 2009, mentioning that they believe that the U.S economy will show negative growth up until the end of the year.
The U.S stock market traded mixed during yesterday’s session, despite comments from officials. After Tuesday’s 5% drop, breaking recent support, traders cashed in on short positions, waiting for the next move to occur. To date traders are observing the S&P500 carefully as it is now coming close to its prior low.
On the Forex market, most of the currency pair’s movements were capped as volatility decreased across the board. The pair that took center stage was the USD/JPY as Japan’s economy continued to show further signs of weakness. During Asian hours (last night) the BOJ released its next plan, expanding its asset purchasing program. The BOJ said that it will buy up to $10.7 worth of corporate bonds to help the economy and help credit problems. The USD/JPY finally broke resistance of 92.11, increasing throughout the session by over 1.5%. After 5 positive session traders should watch out for current resistance of 93.76, which could send this pair into minor consolidation, before its next move.
Gold continued to roar, climbing throughout the session. This safe haven is now trading around July’s high of $977.40. As shown on the chart below, trend line resistance and resistance of $977.40 are currently trading at the same price, something that could prevent an immediate break. In addition, relative strength indicators are pointing towards an overbought scenario.
Looking forward, the traded markets should continue to take their cue from the U.S today. As manufacturer’s inflation figures are expected to be released. In addition, the Philadelphia Fed Manufacturing Index should show further contraction coming out at a mere -24.10.
Technical Pictures
USD/JPY Daily chart
Gold Daily Chart
Market Pivot Points
Thursday, February 19, 2009
Economic data was brushed aside during yesterday’s market session as President Obama released his housing plan, while the Fed chairman addressed the public, regarding recent monetary policy trends and the Fed’s economic outlook.
After signing the stimulus package into law, the U.S president released his notes regarding his $75 billion plan for foreclosures and homeowners. According to calculations $75 billion out of the $700 billion will be allocated to borrowers who are forced to take a much larger loan than the current value of their asset. In addition, a percentage of the funds will go to help homeowners and prevent further Economic data published during yesterday’s session only strengthened the president’s statements, as the housing sector failed to show a market bottom, releasing further negative data. Housing Starts fell yet again, showing a figure of 0.47k, much less than what analysts were expecting.
In addition, Federal Reserve Chairman Ben Bernanke gave his meeting minutes regarding the outlook of the U.S economy. The Chairman touched the subject of inflation stating that current monetary actions should not spark inflationary pressures and that their main concern to date is deflation. The Fed reduced yet again their outlook for 2009, mentioning that they believe that the U.S economy will show negative growth up until the end of the year.
The U.S stock market traded mixed during yesterday’s session, despite comments from officials. After Tuesday’s 5% drop, breaking recent support, traders cashed in on short positions, waiting for the next move to occur. To date traders are observing the S&P500 carefully as it is now coming close to its prior low.
On the Forex market, most of the currency pair’s movements were capped as volatility decreased across the board. The pair that took center stage was the USD/JPY as Japan’s economy continued to show further signs of weakness. During Asian hours (last night) the BOJ released its next plan, expanding its asset purchasing program. The BOJ said that it will buy up to $10.7 worth of corporate bonds to help the economy and help credit problems. The USD/JPY finally broke resistance of 92.11, increasing throughout the session by over 1.5%. After 5 positive session traders should watch out for current resistance of 93.76, which could send this pair into minor consolidation, before its next move.
Gold continued to roar, climbing throughout the session. This safe haven is now trading around July’s high of $977.40. As shown on the chart below, trend line resistance and resistance of $977.40 are currently trading at the same price, something that could prevent an immediate break. In addition, relative strength indicators are pointing towards an overbought scenario.
Looking forward, the traded markets should continue to take their cue from the U.S today. As manufacturer’s inflation figures are expected to be released. In addition, the Philadelphia Fed Manufacturing Index should show further contraction coming out at a mere -24.10.
Technical Pictures
USD/JPY Daily chart
Gold Daily Chart
Market Pivot Points
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