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Minutes from the FOMC

Tue, Aug 26 2008, 06:15 GMT
by Jyske Bank Team

Jyske Bank


Today’s comment

Majors & Scandies

By the Majors & Scandis Team

Yesterday was a very quiet session since London was visiting the local pubs on a bank holiday. The euro traded with a soft undertone most of the day and weakened marginally against most currencies. None of the currency pairs we follow has breach any significant resistance or support levels during yesterday’s trading. The most interesting pair was NZDUSD, which fell on a larger than expected trade deficit (11-month high). Shorting NZDUSD once again begins to look interesting… Interest rates fell up to 10bps across the short end of the curve in the US and in the Euro Area. However, overall it was a very quiet session.

Several interesting releases are due today including house prices (CaseShiller & Ofheo), consumer confidence, and new home sales from the US. Existing home sales surprised on the upside yesterday and the market will be hoping for at better than forecasted number.
Our economists are expecting a slight fall due to tightened credit conditions, falling mortgage applications, and very pessimistic construction companies. Minutes from the last FOMC meeting at the Fed are due tonight. The press release August 5 showed that the committee was becoming less concerned with growth and inflation. The interesting part of the minutes will be how the votes were divided among the FOMC members. Our economists are still forecasting 2x 25bps rate cuts from the Fed (in Q4 ’08 and Q1 ’09) due worsening outlook for unemployment.

Major Short Term

Emerging Markets

By the Emerging Markets Team

Yesterday the Hungarian central bank kept the key rate unchanged at 8.5 %. This was expected by everybody in the market and in general we had a quiet day, because of the bank holiday in England. Yesterday evening US equities dropped because of the collapse of another US bank. Despite that USD performed against EUR during the night. This USD movement is consistent with our general recommendation in which we prefer Latin American currencies to Eastern European currencies. Today we do not have any important EM data on the agenda. Thus we expect another quiet day in the office. We keep our recommendations for now.

Emerging Markets


Today’s Key Events

  • 08:10 GFK Consumer Confidence, DEM

  • 09:30 Producer Prices, SEK

  • 10:00 IFO Business Climate, DEM

  • 10:00 Retail Sales, PLN

  • 15:00 CaseShiller House Prices, USD

  • 16:00 Consumer Confidence from Conference Board, USD

  • 20:00 Minutes from last FOMC Meeting, USD

Published on  Tue, Aug 26 2008, 06:24 GMT


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The analysis is based on information which Jyske Bank finds reliable, but Jyske Bank does not assume any responsibility for the correctness of the material nor for transactions made on the basis of the information or the estimates of the analysis. The estimates and recommendations of the analysis may be changed without notice. The analysis is for the personal use of Jyske Bank's customers and may not be copied.


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