Following the 2012 Dutch elections, exit polls suggest that Mark Rutte's party (Party for Freedom and Democracy) is in the lead with 41 seats out of the 140-seats in Parliament. The victory however is limited as the left Labour Party, led by Diederik Samsom is expected to receive 40 seats. If that is the case it will be very difficult to build a coalition between the center-right and the center-left. This could actually weigh on the financial markets but the US Federal Open Market Committee (FOMC) announcement of a possible QE3 at 16:30 GMT with a press conference at 18:15 GMT could prevent deep losses across the board. EUR/USD is currently maintaining its gains above 1.2900. Traders should ask themselves for how long this may be in light of the Netherlands elections.
Fed QE3 or Empty Words?
As the market prepares for Ben Bernanke's press conference, the Wall Street Journal (WSJ) survey shows that 34 out of 47 analysts believe there will be QE3 today but the majority are skeptical whether it will actually have any benefits on the economy. The Fed in my opinion is likely to extend its low-rates pledge into 2015. If any QE3 is introduced, I will not rule out the possibility of any sterilization to the fresh funds, which may actually strengthen the US dollar rather than weaken the world's reserve currency.
SNB and Italy Bond Auction
At 07:30am GMT the Swiss National Bank (SNB) will announce its monetary policy with faint speculations that the central bank wishes to raise EUR/CHF 1.2000 floor. Following the SNB interest rate announcement, Italy's Dipartimento del Tesoro is due to tap its 3-year benchmark, 4.50% July 2015 for between
View the Original article
0 comments:
Post a Comment