Home > Uncategorized > 2012/08/01: Quick Post: Pre-FOMC: Fresh Tech now available

2012/08/01: Quick Post: Pre-FOMC: Fresh Tech now available

© 2012 ROHR International, Inc. All International rights reserved.

The Technical Projections and Select Comments are now available through the link in the right hand column. That is along with this week’s previously provided Weekly Report and Event Calendar and Summary Perspective on Key Influences, also all available through the link in the right hand column.Even as demure as we try to be at most times, due to the pressure on central banks to “do something”, we could not help but note that this is going to ultimately be a proverbial MONSTER WEEK.

And it is no secret that even with the imminent FOMC announcement, the real crux of the matter is whatever transpires at the ECB post-rate decision press conference Thursday morning (US time.) After President Draghi’s bold pronouncement on doing ‘whatever is necessary’ to save the euro currency project, there will be a major focus on the specifics at that press conference. And even beyond that, there are surrounding factors which are so highly critical…

…such as just how much of any expanded ECB liquidity or bond buying program will be supported by the northern European powers-that-be, especially Germany. After last week’s intergovernmental Merkel-Hollande-Monti Love Fest, we now hear that the government and the entire German cabinet are in fact very much against providing the soon to be initiated European Stability Mechanism (ESM) a banking license. For anyone out there who is not already aware, that specifically limits its ability to leverage its funding by essentially purchasing European government bonds on margin.

And yet, that has the ECB cart a bit out in front of today’s FOMC horse. Our guess is that US economic data is not yet sufficiently weak (even in light of the weakness of the global economy) to provide the FOMC the incentive to engage in further quantitative  easing (QE) right now. More likely the statement language slants heavily toward employing it timely if there is no improvement within a reasonable length of time. We shall see.

General Market Observations

Obviously much for all asset classes still rests with the overall decision this week on whether September S&P 500 future manages to maintain a weekly Close above previous near-term 1,375 Double Top prior to falling back below more prominent 1,350-55 historic congestion. This will obviously have much to do with the inferences drawn from the FOMC statement this afternoon, and more important ECB post-rate decision press conference tomorrow.

And it will undoubtedly be no small influence on the other asset classes as well, especially the primary government bond markets. Of course, the one that has the most direct stake in the extent and nature of any ECB government bond market support or quantitative easing is the now highly volatile September German Bund future. The key area to watch there not just on any near-term swing but for the weekly Close is 143.75-.50.

Thanks for your interest.

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