Tuesday, June 18, 2013

Awaiting the FOMC's Meeting

Be careful of what Ben Bernanke will tell us about U.S. monetary policy. After the Fed's two-day meeting, the market will be very attentive to the words of the president of the central bank of the United States.

Expectations about reducing purchases of bonds in its QE program are high, fueled by Bernanke's own statements, both as members of the Fed, as Bullard, who recognized the need to unwind the stimuli.

The effect has been really impressive, as we have seen yields on bonds rose sharply. In the emerging markets, currencies have fallen sharply against the impact it may have less liquidity in commodities. In fact, countries like Brazil and Indonesia have been forced to intervene.

For all these reasons, the expectations of the Fed on the U.S. economy are more optimistic than in other meetings, and therefore this is positive for the dollar.

I believe that the USD/JPY has the most upward path, after corrections produced by doubts about Abenomics policies.

S&P 500

The world looks to Wall Street, again. The index has a distinctly lateral movement while waiting for the Fed's meeting. With an average of 50 sessions almost flat and support levels at 1590 and resistance at 1641, we can not lose sight of the decision of the monetary policy. In the short term, the movement is expected to be lateral, as it is clearly shown in the chart.

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