Doubts About The Fed's

Weekly Economic and Financial Commentary U.S. Review A Rough Start To April Another week of softer U.S. economic data weighed on market sentiment this week. More hints of slower economic growth are appearing in the data, consistent with our forecast that U.S. GDP growth slows to a 2.8 percent annualized pace in the first quarter and continues slowing to a sub 2 percent annualized pace in the second. Initial jobless claims jumped by 13,000 in the first week of April. February imports plunged 2.7 percent, small business confidence fell in March for the first time in seven months and core inflation is on the rise. A Rough Start to April United States economic data releases so far this month have not been kind to the bulls on Wall Street. The poor March payroll report rattled some ...

The Weekly Bottom Line : 16/03/2012 HIGHLIGHTS OF THE WEEK United States Market participants are clearly trading on what everyone else seems to be feeling: the recovery is back. But the Fed, for its part, is not yet willing to admit that the economy has entered a new, stronger phase. Though the quickening pace of job growth is a positive sign, disposable income growth is still stagnant, and the recent run-up in commodity prices threatens to erode consumer spending growth. Europe's troubles haven't gone away. If market sentiment get's too far ahead of itself, the Fed may be tempted to fight back with another round of asset purchases. But if rising borrowing costs are a product of a stronger recovery then the Fed should be less concerned. Increased spreads may actually be ...

The number of Americans filing for new jobless benefits fell to a near four-year low last week and factory activity in the Mid-Atlantic area grew in February, more evidence of sustained momentum in the economy. The economic outlook was brightened further by other data on Thursday showing builders breaking more ground on new residential projects in January, pointing to signs of life in the distressed housing market. The reports added to a raft of solid data that now has analysts expecting only a mild slowdown in growth in the first quarter. Economists also have dialed down their expectations for another round of bond-buying or quantitative easing by the Federal Reserve. "The numbers add to the belief that the economy is shifting gears. There is just no number that is giving us a whole ...

(Reuters) - The euro slid to a three-week low versus the dollar on Thursday as officials in Europe considered delaying a bailout package for Greece even as the indebted country met demands set by international lenders. Several EU sources said on Wednesday the euro zone is examining ways of holding back parts or even all of the bailout program until after elections expected in Greece in April while still ensuring it avoids a disorderly default. "The euro is under pressure as the talk of delaying the bailout package is raising uncertainty. It's not clear whether Athens will be able to secure funds needed to redeem bonds on March 20," said Sumino Kamei, senior analyst at Bank of Tokyo-Mitsubishi UFJ. Greece has 14.5 billion euros of debt repayments due that day -- a sum it cannot pay ...

The euro fell and global shares pared gains on Wednesday as a rally that pushed Wall Street to seven-month highs weakened amid mounting concerns about a bailout of Greece and renewed doubts among Federal Reserve officials about the U.S. economy. The euro extended losses against the dollar, falling to a more than one week low, while the dollar pared losses against the yen after minutes from the Fed's latest meeting in January sparked fresh risk aversion. The euro was down 0.37 percent at $1.307. A few Fed officials believed another round of central bank bond buying would be needed before long to support the U.S. economy, but others withheld judgment to await more data. U.S. stocks hugged break-even for most the session but retreated late in the day as Apple Inc (AAPL.O) pared a 3.3 ...

Just three weeks after policy makers unprecedentedly decided to extend their pledge to keep the borrowing costs low through at least late 2014, the minutes of Jan. 24-25 FOMC meeting once again signaled the economy is expanding moderately and highlighted the relevancy of a highly accommodative policy to support a recovery that is strongly exposed to big risks. In particular, Fed minutes showed that few FOMC members suggest the central bank may soon have to consider more easing, backing economic conditions could warrant additional assets purchases before late 2014, the timeframe of which the Fed saw necessary for the interest rates to be held near zero to bolster growth and minimize unemployment. So far, almost all FOMC members agreed to maintain "highly accommodative stance" and expect ...

(Reuters) - The United States created jobs at the fastest pace in nine months in January and the unemployment rate unexpectedly dropped to a near three-year low, giving a boost to President Barack Obama. Nonfarm payrolls jumped 243,000, the Labor Department said on Friday, as factory jobs grew by the most in a year. The jobless rate fell to 8.3 percent - the lowest since February 2009 - from 8.5 percent in December. The gain in employment was the largest since April and it far outstripped the 150,000 predicted in a Reuters poll of economists. It hinted at underlying economic strength and lessened chances of further stimulus from the Federal Reserve. "More pistons in the economic engine have begun to fire, pointing to accelerating economic growth. One of the happiest persons reading this ...

Dukascopy Fundamental Analysis EUR Royal Dutch Shell announced it plans to invest more to boost production. The company reported it would invest 30 billion US Dollars into the new gas and oil projects in 2012 as compared to 24 billion US Dollars invested in 2011. The move came after the company announced the annual rise in net income by 50% to 28 billion US Dollars in 2011. USD US employment surged more than predicted in January while the unemployment level dropped to the lowest reading in last three years, confirming the US labour market is recovering and raising doubts about Fed's pledge to maintain interest rates down by the end of 2014. The number of payrolls increased by 243 000 and the jobless rate decreased to 8.3% in January. Economists earlier predicted the unemployment level ...

(Reuters) - The Federal Reserve took the historic step on Wednesday of setting an inflation target, of 2 percent, a victory for Chairman Ben Bernanke that brings the Fed in line with many of the world's other major central banks. The central bank, in its first ever "longer-run goals and policy strategy" statement, said, however, it was not appropriate to adopt a fixed goal for employment because the level of unemployment that can be achieved without sparking inflation is not largely determined by monetary factors. The inflation target is at the high end of what was traditionally seen as an informal target range of roughly 1.7 percent to 2 percent and caps Bernanke's crusade to improve communications at what for years had been purposefully opaque and secretive deliberations at the Fed. ...