Press Release Summary: Last week the Dow
Jones poked past the psychologically important 14,000 level.
However this push could falter as traders question the strength
of the post summer rebound says Betonmarket\'s Michael Wright.
Press Release Body: While last week\'s economic data was still important,
most traders are focusing their attention on the FOMC (the US
central bank). The minutes from the last FOMC meeting will be
poured over word by word on when they are released on Tuesday. The
main questions are:
Will the FOMC actually cuts interest rates again?
Is a rate cut actually needed now with wheat and oil prices still soaring.
Is it too late to avoid an economic slowdown?
A man who is credited with fixing the last credit crunch was quoted
last week as saying that most of the credit damage has been done.
Any move from the FOMC now could be more for show rather than effective.
In fact it could actually be counter productive, as it will allow
inflation to eat more of the consumers\' purchasing powers.
The man quoted?
None other then Alan Greenspan.
\"We are beginning to see the frenzy calm down,\" the former chairman
of the Federal Reserve told a conference in Lisbon. \"Unless we
get secondary effects the worst is over.\" While Greenspan has no
decision making power anymore, his ideas and remarks are widely
followed.
This crunch affected banks world wide, as Germany\'s largest bank
Deutsche
Bank wrote down more than $3 billion in the wake of the liquidity
crunch. A recent survey showed that the Euro zone service sector
growth suffered its biggest slowdown in at least nine years in September,
as the credit squeeze hurt business and new orders. U.S. service
sector growth also stumbled to the weakest rate since March. The
big question of course is whether the worst is indeed behind us
as Greenspan implies.
Over the coming weeks there will be ever more attention paid to
interest rate sensitive data, such as inflation, debt auctions consumer
and corporate spending. Also there may be less pressure on the USD.
If a country is on a rate cutting streak its currency tends to lose
value and vice versa. Some argue that the extra rate cut that Greenspan
is warning against is priced into the price of the Euro/USD over
the last few weeks. The weakening Dollar and strengthening Euro
has pushed the pair past record high after record high. If the rate
cut were not to happen, the dollar could recover some of the ground
recently ceded to various currencies.
While Greenspan\'s thoughts carry a lot of weight, they are no longer
the final word. So there is potential that while he is predicting
no rate cut, one could actually still happen. Intense speculation
on the decision could result in a huge spike up or down on the day
of the announcement. Thankfully using Betonmarkets.com you can take
advantage of this potential volatility without having to know which
direction the spike will be.
An up or down trade compensates you if the market touches either
a higher or lower trigger. It only has to touch either level once
and you win. An up or down trade on the EURO/USD with 25-30 day
term and 200 pips (2 cents) each way potentially returns 8% ROI.
This means that you are predicting that the EURO/USD will move significantly
in either direction before November.
Address:
Regent Markets (IOM) Limited
3rd Floor, 1-5 Church Street
Douglas, Isle of Man
IM1 2AG
Betonmarkets.com is the leading fixed-odds
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Web Site: http://www.betonmarkets.com
Contact Details: Regent Markets (IOM) Limited
3rd Floor, 1-5 Church Street,
Douglas, Isle of Man IM1 2AG,
British Isles.
2009
