Tag Archives: Federal Reserve

BoJ Follows Fed

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Binary Options News : September 19, 2012

Yannis Stournaras caricature for the business newsBoJ Follows Fed

Japan

Asian stocks received a boost in overnight trading as the Bank of Japan expanded its easing program and boosted asset purchases; following on from the Fed Reserve’s third round of quantitative easing last week.

The world’s third largest economy grew at half the rate initially estimated in the second quarter and the JPY reached a seven month high of 77.13 against the US dollar when on the 13th September the Federal Reserve announced its open ended strategy to purchase mortgage backed securities via the buying of $40 billion a month of mortgage debt.

The past five years has seen the JPY gained about 48% and the appreciation in the Yen has made it more difficult to export its goods and the Bank of Japan took the step of increasing its asset purchase fund to 55 trillion from 45 trillion whilst keeping its lending facility unchanged at 25 trillion JPY. The Bank of Japan also announced it was keeping its interest rates unchanged at 0.10%.

Stocks

Asian trading overnight saw Hong Kong’s Hang Seng Index increase to 1.05% valued at 20,818.80, Australia’s S&P/ASX200 increase by 0.35% to be valued at 1458.15, whilst Japan’s Nikkei 225 Index increased by 1.59% to be valued at 9268.5.

Oil

Despite growing tensions with Iran and the West, most recently highlighted by the various military and naval drills in the Strait of Hormuz which accounts for the transportation of approx 35% of all transported oil, Crude Oil gained 0.63% in Asian markets overnight as investors snapped up cheap positions, ending a selloff sparked by concerns over the state of the European economy. A barrel is now priced at $96.22.

Today’s Outlook

Investors should expect some movement in the USD and US stocks when Housing Starts, Building Permits and Existing Home Sales figures all get released in the US later today. Although an increase is expected in the number of Housing Starts, there are declines expected in both Building Permits and existing home sales.

 

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Disclaimer: The opinions expressed in this article are not necessarily those of OptionsClick, blog.optionsclick.com, OptionsClick.com or any of its staff. The contents of this article are in no way intended to be advice or any other form of counsel for any trader of binary options or any other investor. Please be advised: Investing of any kind always carries a relative risk. As with any market trading, it is always possible to lose your investment. Always be sure to do your own research, seek professional advice, and make your own, well-educated decisions when it comes to financial investments.

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Bernanke’s Comments Boosts Stocks and Dollar

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binary options editorial caricature sarkozy thinks of dominique strauss-kahnUS and Asian markets saw a rise in the USD and Stocks following on from comments made by Federal Reserve Chairman Ben Bernanke. Speaking in Virginia to economists, Bernanke hinted that the US Central Bank’s supportive monetary policy would remain in place. The Fed Chairman voiced concerns over the labor market, despite three months of increased figures, saying “Despite the recent improvement, the job market remains far from normal. The numbers of people working and total hours worked are still significantly below pre-crisis peaks.”. An average of 245,000 jobs were added to the US economy from December to February and unemployment is down to 8.3% from June 2011’s figure of 9.2%. However, Bernanke’s reiteration to “remain cautious” was taken at a sign that interest rates would be kept at record lows until 2014 whilst keeping additional monetary policies firmly on the table and a third round of monetary easing may be needed to bolster the economy and inject liquidity into a delicate economy.

As a result of the comments made, Investors piled into Stocks and the USD sending Indices higher. The Dow Jones finished 1.23% higher and there were also gains made in the Nasdaq (1.78%), the US 30 (1.23%) and the Japan 225 which enjoyed a sizeable gain of 2.31% in Asian trading. Hong Kong’s Hang Seng Index increased by 1.57%. The US Dollar Index increased by 0.05%, trading at 79.14 as the USD made gains against most major currencies. Despite positive data released in the German business climate index, rising to 109.8 in March from a revised 109.7 in February, the EUR/USD was down 0.12%, trading at 1.3342. The USD/JPY was also up, increasing by 0.08%, trading at 82.89 as investors were given enough reason to move into the USD once more.

Today, investors can expect increased volatility when Bernanke continues speaking at 5.45pm GMT whilst the GBP may see some movement when The Confederation of British Industry (CBI) Distributive Trades Survey (DTS) releases figures measuring the health of the retail sector at 11am GMT. Previous was -2, forecast -4. Today, some will be selling the GBP/USD as speculation increases of the UK entering a double dip recession.

 

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Disclaimer: The opinions expressed in this article are not necessarily those of OptionsClick, blog.optionsclick.com, OptionsClick.com or any of its staff. The contents of this article are in no way intended to be advice or any other form of counsel for any trader of binary options or any other investor. Please be advised: Investing of any kind always carries a relative risk. As with any market trading, it is always possible to lose your investment. Always be sure to do your own research, seek professional advice, and make your own, well-educated decisions when it comes to financial investments.

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