During his testimony in Washington, Fed Chairman Bernanke stated that the Fed has the tools to control inflation. This comment has pumped life into the U.S. Dollar at the expense of higher yielding assets.
Traders are buying the U.S. Dollar on the notion that control over inflation will actually benefit the greenback. For months investors had been putting pressure on the Dollar in anticipation of inflation. Now it appears that investors would prefer to limit positions just in case Mr. Bernanke can actually achieve his goal.
September Treasury Bonds and Notes are surging to the upside because of the bullish comments regarding inflation. Investors had been discounting higher inflation in the future because of the huge amount of debt the Treasury has been dumping on the market.
Equity markets are falling as traders see a better opportunity in the fixed income sector at this time. Traders also feel that the Fed may cut off some of the excess liquidity they have been supplying to the market in an effort to revive the economy.
Surprisingly the precious metals are seeing limited downside pressure despite negative comments regarding inflation. One would expect a comment suggesting control over inflation to put downside pressure on an asset which is primarily used as a hedge against inflation.
Improving weather conditions are pressuring November Soybeans and December Corn once again today. Traders fear the USDA will substantially increase the size of this year’s crop in its next report in August.
Traders are buying the U.S. Dollar on the notion that control over inflation will actually benefit the greenback. For months investors had been putting pressure on the Dollar in anticipation of inflation. Now it appears that investors would prefer to limit positions just in case Mr. Bernanke can actually achieve his goal.
September Treasury Bonds and Notes are surging to the upside because of the bullish comments regarding inflation. Investors had been discounting higher inflation in the future because of the huge amount of debt the Treasury has been dumping on the market.
Equity markets are falling as traders see a better opportunity in the fixed income sector at this time. Traders also feel that the Fed may cut off some of the excess liquidity they have been supplying to the market in an effort to revive the economy.
Surprisingly the precious metals are seeing limited downside pressure despite negative comments regarding inflation. One would expect a comment suggesting control over inflation to put downside pressure on an asset which is primarily used as a hedge against inflation.
Improving weather conditions are pressuring November Soybeans and December Corn once again today. Traders fear the USDA will substantially increase the size of this year’s crop in its next report in August.
