CFD Markets News and Forecasts — 09-08-2011

Stocks pop higher on the defined "extended period" language. FOMC redefined "extended period" as "at least through mid-2013" left its rates unchanged (0% -0.25%).

• FOMC redefined "extended period" as "at least through mid-2013".
• Fed interest rates were remained unchanged (0% -0.25%).
• "Is prepared to employ tools (to promote a stronger recovery) as appropriate."
•  Fed expects slower pace ahead than in June.
• Infl moderated, will settle lower.
• "Downside risks to the econ outlook have increased."

The euro gained against the US dollar as investors bet the Federal Open Market Committee will repeat its pledge to maintain stimulus measures to revive confidence in the U.S. economy. Another catalyst to rise was the fact that the European Central Bank today purchased Italian and Spanish debt in an attempt to curb the nation’s surging borrowing costs and prevent the crisis spreading further.
The pound slumped versus the greenback amid the worst civil unrest in 30 years spread in the country and weaken-than-expected U.K. manufacturing unexpectedly. According the UK National Statistics, the UK industrial production didn't advanced in June, while analysts forecasted gaining by 0.4% after its previous rise by 0.9%.
The Swiss franc appreciated to fresh historical high against the dollar as investors favored the safest assets amid concern global growth is faltering. Earlier the franc slightly dropped amid weaken-than-expected July consumer confidence.
The yen also gained versus the dollar as “save haven” currency. The Japanese currency has almost erased its decline since the nation’s unilateral intervention on The Bank of Japan added 10 trillion yen ($129 billion) of monetary stimulus on Aug. 4.
The Canadian dollar rose for the first time in eight days against its US rival as an advance in North American stocks reduced demand for a refuge in the greenback. Rising oil prices also supported the loonie.

The major US equities are around session highs. The Nasdaq Composite currently boasts the biggest move by percent (+3.56%).
The Nasdaq's surge as large-cap tech plays like Apple (AAPL +4.4%) and Google (GOOG +3.8%) surge after enduring a sharp drop in the prior session. Technolody sector added 1.2%.
Semiconductor-related plays are up, but lagging on a relative basis, however. In turn, the Semiconductor HOLDRs ETF (SMH) is up less than 2%.

The markets hold in the green zone ahead of today's meeting of the Federal Open Market Committee.

September WTI crude oil renewed its fall and currently at $81.85 per barrel (+0.66%), after trading in a $75.71 to $83.05 range. Earlier the bulls were supported on waiting of Federal Reserve’ statement on monetary policy that may hint a further easing. At the low seen overnight, WTI was down $24.91 from the $100.62 peak seen only two weeks ago.

Stocks opened today's trade with impressive gains, but the move was quickly challenged by traders looking to sell the bounce. Pressure actually pushed the Dow to a fractional loss in negative territory before it was able to rebound alongside its counterparts.
Financials, which plummeted 10% in the prior session, have actually provided some support to the broad market this morning. The sector's 2.0% bounce comes as bargain hunters offer a bid for banks and diversified financial services plays after their beat down yesterday.

Rate trades in mid-range around Y77.20 ahead of the Y77.00 and Y77.50 option expiries. Bids at Y77.10/05 and Y77.00/95, offers seen at Y77.50/60.60.

U.S. stocks appeared set for a choppy session Tuesday, following the market's worst day since the 2008 financial crisis, as investors awaited the Federal Reserve's latest statement on monetary policy.
U.S. stocks have fallen 15% during the past two weeks, and Monday's beating was the most brutal thus far. Stocks posted their worst losses since the 2008 financial crisis -- amounting to a paper loss of about $1 trillion, in the aftermath of S&P's downgrade of the U.S. credit rating.
All three major indexes sank between 5% and 7%, pushing the Dow below 11,000 for the first time since last November. The sell-off was worse than the 512-point drop stocks experienced only three trading sessions before.
Bank stocks were among the hardest hit during Monday's slide -- with Bank of America shares tumbling 20%, after AIG (AIG, Fortune 500) said it is suing the bank for billions of dollars over mortgage security fraud.
But Bank of America's (BAC, Fortune 500) stock was poised to recoup some of those losses, with shares up more than 6% in premarket trading Tuesday.
All eyes will be on the Federal Reserve when it releases its monetary policy statement at 1815 GMT on Tuesday. Investors will likely pour over the central bank's announcement for hints that the Fed will take steps to stabilize markets, and revitalize the slowing economic recovery to avoid a double-dip recession.
Companies: After the closing bell, Dow component Walt Disney (DIS, Fortune 500) will head to the earnings stage. The media giant is expected to report a profit of 73 cents a share.
World markets:

Oil for September delivery rose 80 cents to $82.11 a barrel.
Gold futures for December delivery gained $37 to $1,750.20 an ounce. Earlier, gold prices hit a record intraday high of $1,782.50 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 2.39% from 2.34% late Monday.

The yen and the Swiss franc strengthened as concern over a U.S. economic slowdown, tumbling stock markets and the euro region’s debt crisis spurred demand for the currencies as a refuge.
The dollar fell against the euro and the yen on speculation the Federal Open Market Committee will repeat its pledge to maintain stimulus measures to revive the economy. The franc reached records versus the euro and the dollar. The benchmark Stoxx Europe 600 Index rose, after falling earlier for the eighth consecutive day.
“Investor sentiment is very fragile, boosting demand for the safest currencies, such as the yen and franc,” said Lee Hardman, a strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “There’s a strong focus on today’s FOMC meeting. The market is looking for another shot in the arm from more quantitative easing. Investors are hesitant to buy the dollar given the risk of more quantitative easing.”
The Japanese currency has almost erased its decline since the nation’s unilateral intervention in the foreign-exchange market pushed it to as weak as 80.24 per dollar on Aug. 4. That same day, The Bank of Japan added 10 trillion yen of stimulus. BOJ Governor Masaaki Shirakawa today said volatile exchange rates could have a “negative impact” on the economy.
The Federal Reserve meets today on monetary policy and may prolong a pledge to maintain record stimulus, economists at JPMorgan Chase & Co., BNP Paribas SA and Goldman Sachs Group Inc. said. The Fed could commit to hold its $2.87 trillion balance sheet steady for an “extended period,” they said.
Fed policy makers are likely to embark on a third round of large-scale asset purchases, moving “more decisively” to secure the U.S. recovery, Harvard University economist Kenneth Rogoff said.

Federal Reserve policymakers face enormous challenges and pressures  ahead of the 1815GMT announcement today.

EUR/USD
Offers: $1.4300/05, $1.4320/30, $1.4350/60, $1.4400
Bids: $1.4250/45, $1.4225/20, $1.4205/00, $1.4185/80, $1.4160/50, $1.4130, $1.4100

EUR/USD  $1.4100, $1.4150, $1.4200, $1.4250, $1.4285, $1.4385
USD/JPY Y77.00, Y77.50, Y78.00, Y78.50
EUR/JPY Y113.00
GBP/USD $1.6330, $1.6285, $1.6100
EUR/GBP stg0.8750
USD/CHF Chf0.7500, Chf0.7800
AUD/USD $1.0300, $1.0400

Aussie trades higher approaching $1.0200 mark, tracking euro-dollar gains. Resistance seen at $1.0210 ahead of offers at $1.0250/60. Aussie bids remain at $1.0085.

EUR/USD $1.4100, $1.4150, $1.4200, $1.4250, $1.4285, $1.4385
USD/JPY Y77.00, Y77.50, Y78.00, Y78.50
EUR/JPY Y113.00
GBP/USD $1.6330, $1.6285, $1.6100
EUR/GBP stg0.8750
USD/CHF Chf0.7800

Nikkei   8,944 -153.08 -1.68%   

Hang Seng 19,576 -914.44 -4.46%  
S&P/ASX   4,035 +48.72 +1.22%  
Shanghai Composite  2,526 -0.75 -0.03%

Data:01:30 Australia National Australia Bank's Business Confidence (Jul) 2 
01:30 Australia Home Loans (Jun) 0.0% 
02:00  China Producer Price Index (YoY) (Jul) 7.5% 
02:00  China Consumer Price Index (YoY) (Jul) 6.5% 
05:00  Japan Consumer Confidence Index (Jul) 37.0 

Resistance 3: Y79.40 (Aug 5 high) 

Resistance 2: Chf0.7740 (Aug 5 high)

Resistance 3: $ 1.6470 (Jun 7 high, Jul 29 high, Aug 1 and 8 high)