Interest Rates Calendar

ECB meeting: A double dip is not on the cards
Full allotment at all auctions was extended until year-end and interest rates were kept unchanged as expected. Trichet was softer in tone than at the last meeting, but did not seem too concerned about the risk of a double dip: “A double dip is not on the cards in our own analysis”. The staff growth forecasts were revised upward – in particular for this year – whilethe inflation forecast was revised a little up for both 2010 and 2011. Taking a pause on the exit path As expected the ECB kept all <p><a href="http://feedads.g.doubleclick.net/~a/rvEiRW44988cKHCMEJuhQp6679o/0/da"><img src="http://feedads.g.doubleclick.net/~a/rvEiRW44988cKHCMEJuhQp6679o/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/rvEiRW44988cKHCMEJuhQp6679o/1/da"><img src="http://feedads.g.doubleclick.net/~a/rvEiRW44988cKHCMEJuhQp6679o/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=GcCyeBksO8s:9YPel3HfTts:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=GcCyeBksO8s:9YPel3HfTts:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=GcCyeBksO8s:9YPel3HfTts:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=GcCyeBksO8s:9YPel3HfTts:F7zBnMyn0Lo" border="0"></img></a> </div>

FOMC minutes: QEII threshold still unclear
FOMC members and staff revised down their growth forecasts for H2 while leaving potential for disappointments compared to our expectations. Triggers for further quantitative easing remain unclear. Guided by Bernanke’s Jackson Hole speech, consumer spending and the labour market are key. Even if data continue to disappoint, we believe disagreement within the committee will defer any major policy action until after the September meeting. Details Minutes of the August 10 FOMC meeting showed <p><a href="http://feedads.g.doubleclick.net/~a/l8xbTRuiSOkJTi3pEigkph6-Of4/0/da"><img src="http://feedads.g.doubleclick.net/~a/l8xbTRuiSOkJTi3pEigkph6-Of4/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/l8xbTRuiSOkJTi3pEigkph6-Of4/1/da"><img src="http://feedads.g.doubleclick.net/~a/l8xbTRuiSOkJTi3pEigkph6-Of4/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=HBWGY2-a-rg:eUZx5VPws9c:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=HBWGY2-a-rg:eUZx5VPws9c:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=HBWGY2-a-rg:eUZx5VPws9c:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=HBWGY2-a-rg:eUZx5VPws9c:F7zBnMyn0Lo" border="0"></img></a> </div>

ECB preview: Liquidity support still needed
On Thursday, the ECB will release updated macroeconomic projections and Trichet will announce the liquidity strategy for the remaining part of the year. The tone of the press conference should remain cautious. We expect the 2010 GDP forecast to be raised from 1.0% to 1.6%, while the 2011 figure is unlikely to be much higher than the 1.2% envisaged three months ago. Inflation projections should remain largely unchanged. Trichet will probably announce two/three more 3M operations with full <p><a href="http://feedads.g.doubleclick.net/~a/_xH-F-S4R8c4-4VCP-wxWWHtb-8/0/da"><img src="http://feedads.g.doubleclick.net/~a/_xH-F-S4R8c4-4VCP-wxWWHtb-8/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/_xH-F-S4R8c4-4VCP-wxWWHtb-8/1/da"><img src="http://feedads.g.doubleclick.net/~a/_xH-F-S4R8c4-4VCP-wxWWHtb-8/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=JaAUxsM_PNg:GBccHOD7HMo:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=JaAUxsM_PNg:GBccHOD7HMo:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=JaAUxsM_PNg:GBccHOD7HMo:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=JaAUxsM_PNg:GBccHOD7HMo:F7zBnMyn0Lo" border="0"></img></a> </div>

ECB preview: Taking a pause on the exit path
The ECB is taking a pause on the exit path. We expect the full allotment at all auctions to be extended until year-end and interest rates kept unchanged. As the risk of an economic downturn has increased we expect a softer tone at the press conference. Trichet is not going to announce new measures, but the door is still open. The staff growth forecast should be revised upwards – in particular for this year – while the inflation forecast should be kept practically unchanged. We expect a first <p><a href="http://feedads.g.doubleclick.net/~a/L40cf_5QCCAdb1QIbCP_8eMIAE0/0/da"><img src="http://feedads.g.doubleclick.net/~a/L40cf_5QCCAdb1QIbCP_8eMIAE0/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/L40cf_5QCCAdb1QIbCP_8eMIAE0/1/da"><img src="http://feedads.g.doubleclick.net/~a/L40cf_5QCCAdb1QIbCP_8eMIAE0/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=rQKzGxEasRo:vRZEP6a3S3Y:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=rQKzGxEasRo:vRZEP6a3S3Y:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=rQKzGxEasRo:vRZEP6a3S3Y:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=rQKzGxEasRo:vRZEP6a3S3Y:F7zBnMyn0Lo" border="0"></img></a> </div>

ECB: no further exit before 2011
Today, ECB Governing Council Member Axel Weber gave a televised Bloomberg interview. He made some interesting comments. Regarding the ECB’s exit strategy: Mr. Weber basically says that the ECB should keep unlimited lending through year-end: both one-week main refinancing operations (MRO) and one- and three-month long-term refinancing operations (LTRO). Since Mr Weber is considered one of the über-hawks on the ECB Governing Council, the road should now be paved for the ECB to wait until 2011 <p><a href="http://feedads.g.doubleclick.net/~a/cEPVzHUtS1p124YyYQb0bFsLK9E/0/da"><img src="http://feedads.g.doubleclick.net/~a/cEPVzHUtS1p124YyYQb0bFsLK9E/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/cEPVzHUtS1p124YyYQb0bFsLK9E/1/da"><img src="http://feedads.g.doubleclick.net/~a/cEPVzHUtS1p124YyYQb0bFsLK9E/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=NKB61pbqIJE:CtTMeu0c7Fg:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=NKB61pbqIJE:CtTMeu0c7Fg:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=NKB61pbqIJE:CtTMeu0c7Fg:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=NKB61pbqIJE:CtTMeu0c7Fg:F7zBnMyn0Lo" border="0"></img></a> </div>

Constant balance sheet aim fostered by shift to Treasuries
Federal Reserve Balance Sheet Constant balance sheet aim fostered by shift to Treasuries Today’s release of the Fed’s balance sheet reflects the recent FOMC statement declaring the central bank’s intention to reinvest principal of retiring mortgage-backed securities (MBS) into Treasury securities. According to the NY Fed, the central bank purchased $3.6bn and $2.5bn of Treasuries on 19 Aug and 17 Aug, respectively. Operations up to 18 Aug so far have not appreciably changed the size of the <p><a href="http://feedads.g.doubleclick.net/~a/jfm1nPaQCTeJ2329uf-7lzmH0HE/0/da"><img src="http://feedads.g.doubleclick.net/~a/jfm1nPaQCTeJ2329uf-7lzmH0HE/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/jfm1nPaQCTeJ2329uf-7lzmH0HE/1/da"><img src="http://feedads.g.doubleclick.net/~a/jfm1nPaQCTeJ2329uf-7lzmH0HE/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=sDFYo3wWIu0:6vv3gtKnXEI:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=sDFYo3wWIu0:6vv3gtKnXEI:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=sDFYo3wWIu0:6vv3gtKnXEI:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=sDFYo3wWIu0:6vv3gtKnXEI:F7zBnMyn0Lo" border="0"></img></a> </div>

US: Fed puts exit on hold - we postpone hikes to Q4 2011
The Fed announces its intention to reinvest principal payments from Agency and MBS holdings in longer term Treasuries. Such a move will maintain a constant Fed balance sheet and, for now, effectively postpones the exit process. We postpone hikes to Q4 2011. Details Statement language clearly indicates that the Committee has been negatively surprised by recent weak economic data. Members have revised downward their near-term outlook while reiterating their medium-term expectation of a gradual <p><a href="http://feedads.g.doubleclick.net/~a/lx-a2njYB0vc_mdGhPKhany1V0Q/0/da"><img src="http://feedads.g.doubleclick.net/~a/lx-a2njYB0vc_mdGhPKhany1V0Q/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/lx-a2njYB0vc_mdGhPKhany1V0Q/1/da"><img src="http://feedads.g.doubleclick.net/~a/lx-a2njYB0vc_mdGhPKhany1V0Q/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=3Fvl6bvClMo:mYHxufZhNbY:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=3Fvl6bvClMo:mYHxufZhNbY:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=3Fvl6bvClMo:mYHxufZhNbY:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=3Fvl6bvClMo:mYHxufZhNbY:F7zBnMyn0Lo" border="0"></img></a> </div>

US: The Fed will not allow its portfolio to shrink
As expected, the FOMC maintained its target rate for the Fed Funds rate unchanged at between 0 to ¼% and reiterated its expectations that the level of the fed funds rate will stay exceptionally low for an extended period. However the Fed went one step further in its attempt to consolidate the recovery by announcing it will keep the size of its portfolio at the current level. Principal payments from agency debt and mortgage-backed securities will be reinvested in longer-term Treasury securities. <p><a href="http://feedads.g.doubleclick.net/~a/C1YmP7pdJdGQuNtIVXB7zZ07YIo/0/da"><img src="http://feedads.g.doubleclick.net/~a/C1YmP7pdJdGQuNtIVXB7zZ07YIo/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/C1YmP7pdJdGQuNtIVXB7zZ07YIo/1/da"><img src="http://feedads.g.doubleclick.net/~a/C1YmP7pdJdGQuNtIVXB7zZ07YIo/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=ydlBur-1e-Y:caOCAOkPLvE:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=ydlBur-1e-Y:caOCAOkPLvE:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=ydlBur-1e-Y:caOCAOkPLvE:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=ydlBur-1e-Y:caOCAOkPLvE:F7zBnMyn0Lo" border="0"></img></a> </div>

FOMC: Recovery Slower, but Still Intact; Inflation Slows
Today’s FOMC statement reflected a cautious view on the economy with an emphasis on modest gains in household and investment spending. “Subdued” inflation remains. Dissent continues. Economic Outlook: Downgraded Again Economic activity “has slowed” according to the FOMC statement. We agree. Household spending is increasing gradually but remains constrained by “high unemployment, modest income growth, lower housing wealth, and tight credit.” Real positive momentum in the economy is reflected in <p><a href="http://feedads.g.doubleclick.net/~a/9Hk_6GP4QMz9UJw2hSRhtI_Z7rM/0/da"><img src="http://feedads.g.doubleclick.net/~a/9Hk_6GP4QMz9UJw2hSRhtI_Z7rM/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/9Hk_6GP4QMz9UJw2hSRhtI_Z7rM/1/da"><img src="http://feedads.g.doubleclick.net/~a/9Hk_6GP4QMz9UJw2hSRhtI_Z7rM/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=-aoWGNuOX2Y:7HaxON_3b9g:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=-aoWGNuOX2Y:7HaxON_3b9g:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=-aoWGNuOX2Y:7HaxON_3b9g:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=-aoWGNuOX2Y:7HaxON_3b9g:F7zBnMyn0Lo" border="0"></img></a> </div>

US: Fed Goes Through with Quantitative Easing Lite
The Fed downgraded its assessment of the the economy, saying that data is showing “the pace of recovery in output and employment has slowed in recent months.” Much of the statement of the economy remained unchanged, with the end saying that the the pace of the economy recovery “is likely to be more modest in the near term than had been anticipated.” A gloomier Fed outlook was expected by most traders and investors, with the main question remaining what the Fed would do about it. The Fed <p><a href="http://feedads.g.doubleclick.net/~a/NOQajh8uxItjSE1-hB-kF6uGa5w/0/da"><img src="http://feedads.g.doubleclick.net/~a/NOQajh8uxItjSE1-hB-kF6uGa5w/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/NOQajh8uxItjSE1-hB-kF6uGa5w/1/da"><img src="http://feedads.g.doubleclick.net/~a/NOQajh8uxItjSE1-hB-kF6uGa5w/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=sdXdQ6rW6Pw:9lQyiYRt5A8:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=sdXdQ6rW6Pw:9lQyiYRt5A8:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=sdXdQ6rW6Pw:9lQyiYRt5A8:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=sdXdQ6rW6Pw:9lQyiYRt5A8:F7zBnMyn0Lo" border="0"></img></a> </div>

FOMC preview August 10
Contrary to market speculation, we do not expect any changes to policy measures or the balance sheet management at today's FOMC meeting. The recent deterioration in data should warrant a softer tone in the statement. The growth section is likely to be downgraded, but with no material changes to the outlook. The "extended period" language should be retained and the forward-looking section is likely to see a dovish twist indicating a softening in the policy stance. While the statement will <p><a href="http://feedads.g.doubleclick.net/~a/6swavG1T2vq5iZWbuH0G6QiYgoA/0/da"><img src="http://feedads.g.doubleclick.net/~a/6swavG1T2vq5iZWbuH0G6QiYgoA/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/6swavG1T2vq5iZWbuH0G6QiYgoA/1/da"><img src="http://feedads.g.doubleclick.net/~a/6swavG1T2vq5iZWbuH0G6QiYgoA/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=V0MjMV5AmV8:ciRQmXsWThQ:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=V0MjMV5AmV8:ciRQmXsWThQ:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=V0MjMV5AmV8:ciRQmXsWThQ:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=V0MjMV5AmV8:ciRQmXsWThQ:F7zBnMyn0Lo" border="0"></img></a> </div>

ECB meeting: Trichet will not declare victory yet
The ECB meeting did not bring any surprises and the press statement included only minor changes. The ECB kept its refi rate unchanged at 1.0% and did not renew any non-standard measures. Market reaction has been limited, as we expected. Trichet emphasised that the recovery was strengthening in Q2 and that available data for Q3 was better than expected, although he would not yet declare victory. We expect the ECB to stay cautiously on the exit path and we still anticipate a first hike in H2 11. <p><a href="http://feedads.g.doubleclick.net/~a/DNhd7qGp3AJ0KO-a1uOmDnrO8pg/0/da"><img src="http://feedads.g.doubleclick.net/~a/DNhd7qGp3AJ0KO-a1uOmDnrO8pg/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/DNhd7qGp3AJ0KO-a1uOmDnrO8pg/1/da"><img src="http://feedads.g.doubleclick.net/~a/DNhd7qGp3AJ0KO-a1uOmDnrO8pg/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=Y2472jxi-4U:0MmTeqstKA0:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=Y2472jxi-4U:0MmTeqstKA0:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=Y2472jxi-4U:0MmTeqstKA0:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=Y2472jxi-4U:0MmTeqstKA0:F7zBnMyn0Lo" border="0"></img></a> </div>

ECB: Rates Appropriate Says Trichet
Armed with better-than-expected data to start the third quarter, ECB President Trichet was marginally more confident in his press conference following the ECB’s decision to keep interest rates at 1%. That rate was “appropriate”, meaning officials do not see a need to raise rates soon. The Euro has weathered a deep crisis this year, and has rebounded 10% since hitting a 4-year low near 1.19. European equity markets have gained 11% in the past month, and manufacturing and services data has showed <p><a href="http://feedads.g.doubleclick.net/~a/02UTuE83tJnQa7iLd6NSZOwOmUM/0/da"><img src="http://feedads.g.doubleclick.net/~a/02UTuE83tJnQa7iLd6NSZOwOmUM/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/02UTuE83tJnQa7iLd6NSZOwOmUM/1/da"><img src="http://feedads.g.doubleclick.net/~a/02UTuE83tJnQa7iLd6NSZOwOmUM/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=Dp_zNF_wkgM:2ec9XO-Xa0E:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=Dp_zNF_wkgM:2ec9XO-Xa0E:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=Dp_zNF_wkgM:2ec9XO-Xa0E:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=Dp_zNF_wkgM:2ec9XO-Xa0E:F7zBnMyn0Lo" border="0"></img></a> </div>

BoE and ECB rate decision: Trichet, the saviour of the Eurozone
Today ECB’s Trichet is expected to say that rates remain appropriate at 1.00% and even though inflation has jumped to a 20-month high, the inflation outlook is well anchored. As usual with the ECB, the press conference will be used by the journalists and analysts to debate the next policy move by the ECB. During the press conference Trichet is again is expected to be questioned on the EU bank stress tests and on the bond buying program which has slowed dramatically in recent weeks. Trichet…the <p><a href="http://feedads.g.doubleclick.net/~a/PgZY3xQ64Y7sS0pU3ep8MePDtdU/0/da"><img src="http://feedads.g.doubleclick.net/~a/PgZY3xQ64Y7sS0pU3ep8MePDtdU/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/PgZY3xQ64Y7sS0pU3ep8MePDtdU/1/da"><img src="http://feedads.g.doubleclick.net/~a/PgZY3xQ64Y7sS0pU3ep8MePDtdU/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=7KScQu4SJW0:CRjh6aOx4aM:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=7KScQu4SJW0:CRjh6aOx4aM:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=7KScQu4SJW0:CRjh6aOx4aM:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=7KScQu4SJW0:CRjh6aOx4aM:F7zBnMyn0Lo" border="0"></img></a> </div>

ECB preview: ECB likely to be pleased
Overall we expect this month’s meeting in the ECB Governing Council to be a non-event and we thus do not look for any major market movements. We expect the ECB to keep its refi rate unchanged at 1.0% and do not expect it to announce any new liquidity or other emergency measures. The ECB can take comfort in the latest market developments and economic news flow, which have been mainly positive. The debt crisis has faded, but there are still risks. The key risk would be that the ECB tightens its <p><a href="http://feedads.g.doubleclick.net/~a/jYJurz3WPgIPklPv-mdL3zAhAkw/0/da"><img src="http://feedads.g.doubleclick.net/~a/jYJurz3WPgIPklPv-mdL3zAhAkw/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/jYJurz3WPgIPklPv-mdL3zAhAkw/1/da"><img src="http://feedads.g.doubleclick.net/~a/jYJurz3WPgIPklPv-mdL3zAhAkw/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=2q8VOB576LE:SHYMDzWvS3M:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=2q8VOB576LE:SHYMDzWvS3M:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=2q8VOB576LE:SHYMDzWvS3M:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=2q8VOB576LE:SHYMDzWvS3M:F7zBnMyn0Lo" border="0"></img></a> </div>

We expect FOMC to raise rates in 3Q11
Federal Reserve Update We expect FOMC to raise rates in 3Q11 We have pushed back our baseline forecast for the first Fed funds rate hike to 3Q11 from 1Q11. Recent economic trends confirm substantial economic slack remains and the pace of growth is going to ease in the second half of the year. While the labor market is improving, the tempo is not sufficient to result in a marked improvement in the unemployment rate. In addition, inflation expectations are well anchored and core inflation is <p><a href="http://feedads.g.doubleclick.net/~a/S11ebgrJ24nXYSIXywE-fo2vIKg/0/da"><img src="http://feedads.g.doubleclick.net/~a/S11ebgrJ24nXYSIXywE-fo2vIKg/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/S11ebgrJ24nXYSIXywE-fo2vIKg/1/da"><img src="http://feedads.g.doubleclick.net/~a/S11ebgrJ24nXYSIXywE-fo2vIKg/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=3gkyAhhOWAg:gXUsLShFsUs:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=3gkyAhhOWAg:gXUsLShFsUs:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=3gkyAhhOWAg:gXUsLShFsUs:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=3gkyAhhOWAg:gXUsLShFsUs:F7zBnMyn0Lo" border="0"></img></a> </div>

Moderate growth, but risks are weighted to the downside
Semi-Annual Monetary Policy Report Moderate growth, but risks are weighted to the downside Heightened uncertainty in the economic outlook due to the global financial situation Inflation forecast remains low and positive, with risks balanced Economic outlook supports low rates for a prolonged period Moderate growth, a gradual decline in the unemployment rate and subdued inflation Bernanke’s remarks in his Semi-Annual Monetary Policy Report before Congress echoed soundings from the most recent <p><a href="http://feedads.g.doubleclick.net/~a/afPaKcS6qnHL9w2rmXK9eiXT6Oo/0/da"><img src="http://feedads.g.doubleclick.net/~a/afPaKcS6qnHL9w2rmXK9eiXT6Oo/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/afPaKcS6qnHL9w2rmXK9eiXT6Oo/1/da"><img src="http://feedads.g.doubleclick.net/~a/afPaKcS6qnHL9w2rmXK9eiXT6Oo/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=1JQfRg2SpHI:T3pUVvTlaoI:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=1JQfRg2SpHI:T3pUVvTlaoI:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=1JQfRg2SpHI:T3pUVvTlaoI:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=1JQfRg2SpHI:T3pUVvTlaoI:F7zBnMyn0Lo" border="0"></img></a> </div>

BOC Raises Rates, but Lowers Growth Forecasts – A Look at USD/CAD
The Bank of Canada, as expected, hiked rates by a quarter point to 0.75% in today’s meeting. The accompanying release, while saying economic activity in Canada was unfolding largely as expected, did cut its forecasts for growth in 2010 and 2011. Growth in 2010 is now forecast at 3.5% from 3.7%, while the forecast for 2011 was revised to 2.9% from 3.1%. “This revision reflects a slightly weaker profile for global economic growth and more modest consumption growth in Canada.” From the Release: <p><a href="http://feedads.g.doubleclick.net/~a/pYWGqi6Yjeu6JaZIpBshO9bqdLw/0/da"><img src="http://feedads.g.doubleclick.net/~a/pYWGqi6Yjeu6JaZIpBshO9bqdLw/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/pYWGqi6Yjeu6JaZIpBshO9bqdLw/1/da"><img src="http://feedads.g.doubleclick.net/~a/pYWGqi6Yjeu6JaZIpBshO9bqdLw/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=k4z08js_sdE:kmSGetRa7L4:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=k4z08js_sdE:kmSGetRa7L4:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=k4z08js_sdE:kmSGetRa7L4:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=k4z08js_sdE:kmSGetRa7L4:F7zBnMyn0Lo" border="0"></img></a> </div>

BOE Minutes Boost Pound as 1 Member Votes for Rate Increase
The Bank of England minutes surprised in that one policy maker, Andrew Sentence, voted to raise the benchmark interest rate to 0.75%, while the other 7 members voted to hold the rate at 0.5%. Sentence favored an increase as he argued that inflation poses a problem due to its resilience. It’s the first call for an interest rate increase in almost two years. Last week, BOE Governor Mervyn King stressed that the UK economy does not show the traits associated with continuously rising prices and <p><a href="http://feedads.g.doubleclick.net/~a/8_oNSJ5-hKBeYDjrbY5O9Krwaas/0/da"><img src="http://feedads.g.doubleclick.net/~a/8_oNSJ5-hKBeYDjrbY5O9Krwaas/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/8_oNSJ5-hKBeYDjrbY5O9Krwaas/1/da"><img src="http://feedads.g.doubleclick.net/~a/8_oNSJ5-hKBeYDjrbY5O9Krwaas/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=W0pLcXVJ6WQ:zl9yMeSLIxk:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=W0pLcXVJ6WQ:zl9yMeSLIxk:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=W0pLcXVJ6WQ:zl9yMeSLIxk:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=W0pLcXVJ6WQ:zl9yMeSLIxk:F7zBnMyn0Lo" border="0"></img></a> </div>

Bernanke Offers Some Soothing Words to Markets, No Double-Dip
In a speech in Asia, Bernanke laid out some of his thoughts on the economy as on monetary policy. Key highlights from his speech included: The recovery is “moderate paced.” “There seems to be a good bit of momentum in consumer spending and investment. My best guess is we’ll have a continued recovery [but] it won’t feel terrific.” In other words, there will not be a double-dip recession. Fed will raise interest rates before the economy returns to “full employment.” Unemployment rate will remain <p><a href="http://feedads.g.doubleclick.net/~a/ZGQFKgFCJW8eiX-5SyLPNhPCfpU/0/da"><img src="http://feedads.g.doubleclick.net/~a/ZGQFKgFCJW8eiX-5SyLPNhPCfpU/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/ZGQFKgFCJW8eiX-5SyLPNhPCfpU/1/da"><img src="http://feedads.g.doubleclick.net/~a/ZGQFKgFCJW8eiX-5SyLPNhPCfpU/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=36VNpwQCKtw:yivqTIIwGL8:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=36VNpwQCKtw:yivqTIIwGL8:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=36VNpwQCKtw:yivqTIIwGL8:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=36VNpwQCKtw:yivqTIIwGL8:F7zBnMyn0Lo" border="0"></img></a> </div>

RBA Holds Rates at 4.5%, First Pause Since February
The Reserve Bank of Australia held rates steady at 4.5%, its first pause in increasing rates since February. Since October of last year, the bank has upped its benchmark rate six times totaling 1.5% or 150 basis points. In its statement the bank said that those rate hikes represent a significant adjustment to monetary policy, but they did leave the prospect of a return from the sidelines within a short period of time saying policy is appropriate only for the “near-term.” While the Euro-zone <p><a href="http://feedads.g.doubleclick.net/~a/p_NKAtN3j6cFGGtII0Z9HlqXVzU/0/da"><img src="http://feedads.g.doubleclick.net/~a/p_NKAtN3j6cFGGtII0Z9HlqXVzU/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/p_NKAtN3j6cFGGtII0Z9HlqXVzU/1/da"><img src="http://feedads.g.doubleclick.net/~a/p_NKAtN3j6cFGGtII0Z9HlqXVzU/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=Ocjdcyz_vYI:ZUCAvPpnFdk:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=Ocjdcyz_vYI:ZUCAvPpnFdk:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=Ocjdcyz_vYI:ZUCAvPpnFdk:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=Ocjdcyz_vYI:ZUCAvPpnFdk:F7zBnMyn0Lo" border="0"></img></a> </div>

FOMC sees private demand growth outside of stimulus
Recent data reflects moderate economic recovery and strengthening labor markets Primary challenges lie in personal consumption and residential real estate Official interest rates remain unchanged at 0%-0.25% FOMC members agreed that the economy is strengthening and the labor market is starting to improve in line with their expectation of moderate growth. In fact, at this meeting, participants submitted projections for economic growth. The average of the central tendency moved up to 3.5% in <p><a href="http://feedads.g.doubleclick.net/~a/GyyGUZWf2DWxThyYw-v6yL9cEgE/0/da"><img src="http://feedads.g.doubleclick.net/~a/GyyGUZWf2DWxThyYw-v6yL9cEgE/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/GyyGUZWf2DWxThyYw-v6yL9cEgE/1/da"><img src="http://feedads.g.doubleclick.net/~a/GyyGUZWf2DWxThyYw-v6yL9cEgE/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=wPnIGDYOrOI:M0gkxUMxofM:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=wPnIGDYOrOI:M0gkxUMxofM:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=wPnIGDYOrOI:M0gkxUMxofM:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=wPnIGDYOrOI:M0gkxUMxofM:F7zBnMyn0Lo" border="0"></img></a> </div>

RBA Hikes Rates, Aussie Tumbles
The RBA hiked its interest rate by another 25 basis points to 4.5% in Tuesday’s Asian session. It was the sixth increase in the benchmark interest rate in the past seven meetings, but in the statement the RBA said that rates should now be “around average levels.” From the Statement : “With the risk of serious economic contraction in Australia having passed some time ago, the Board has been adjusting the cash rate towards levels that would be consistent with interest rates to borrowers being <p><a href="http://feedads.g.doubleclick.net/~a/H_gm6ShztLAigbyRz-U0-V1qI-8/0/da"><img src="http://feedads.g.doubleclick.net/~a/H_gm6ShztLAigbyRz-U0-V1qI-8/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/H_gm6ShztLAigbyRz-U0-V1qI-8/1/da"><img src="http://feedads.g.doubleclick.net/~a/H_gm6ShztLAigbyRz-U0-V1qI-8/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=dyvGRoTIGGQ:EhB58aNSyGY:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=dyvGRoTIGGQ:EhB58aNSyGY:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=dyvGRoTIGGQ:EhB58aNSyGY:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=dyvGRoTIGGQ:EhB58aNSyGY:F7zBnMyn0Lo" border="0"></img></a> </div>

FOMC Statement: April 28, 2010
The Fed maintained the federal funds rate at 0-0.25% Improvement was cited in the labor market and consumer spending No change to the inflation outlook or current monetary policy The FOMC believes that the economy strengthened in the intermeeting period, which is in line with outlooks described by the regional Presidents in recent speeches. While the previous statement described the labor market as “stabilizing,” today’s release highlighted that it is “beginning to improve.” The statement <p><a href="http://feedads.g.doubleclick.net/~a/lewF51AQ75Vt3e4a-QS1jRfa8ms/0/da"><img src="http://feedads.g.doubleclick.net/~a/lewF51AQ75Vt3e4a-QS1jRfa8ms/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/lewF51AQ75Vt3e4a-QS1jRfa8ms/1/da"><img src="http://feedads.g.doubleclick.net/~a/lewF51AQ75Vt3e4a-QS1jRfa8ms/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=S_r0C6rCVrA:fJCHppaQs3Y:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=S_r0C6rCVrA:fJCHppaQs3Y:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=S_r0C6rCVrA:fJCHppaQs3Y:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=S_r0C6rCVrA:fJCHppaQs3Y:F7zBnMyn0Lo" border="0"></img></a> </div>

FOMC Upgrades Assessment of Economy, But Sticks to "Extended Period" Language
In its statement today following the conclusion of its interest rate meeting, the FOMC upgraded its assessment of the economy slightly while maintaining that the recovery is fragile enough that the Fed needs to keep its interest rates at their low levels for an extended period of time. The Fed said that economic activity “has continued to strengthen” and “that the labor market is beginning to improve.” That was better than the language used about the labor market in the previous meeting on <p><a href="http://feedads.g.doubleclick.net/~a/nuHil1fq7XKTYTpIQZ2upuMumKo/0/da"><img src="http://feedads.g.doubleclick.net/~a/nuHil1fq7XKTYTpIQZ2upuMumKo/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/nuHil1fq7XKTYTpIQZ2upuMumKo/1/da"><img src="http://feedads.g.doubleclick.net/~a/nuHil1fq7XKTYTpIQZ2upuMumKo/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=yvnWUi-ccQY:7ZapJAEGgdY:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=yvnWUi-ccQY:7ZapJAEGgdY:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=yvnWUi-ccQY:7ZapJAEGgdY:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=yvnWUi-ccQY:7ZapJAEGgdY:F7zBnMyn0Lo" border="0"></img></a> </div>

Bank of Canada Drops Conditional Commitment, Loonie Soars
In today’s statement following the conclusion of its interest rate decision meeting the Bank of Canada announced that it will maintain its overnight rate target at 0.25%, but that it would remove its conditional commitment to keep rates at that level until the end of the 2nd quarter. Dropping that commitment will fuel speculation that the Bank is ready to begin tightening rates and may do so in its next meeting on June 1st. The Bank increased its projections for growth, now saying that the <p><a href="http://feedads.g.doubleclick.net/~a/uD_dxD7dtzmyEJIsUi53jFr0fXo/0/da"><img src="http://feedads.g.doubleclick.net/~a/uD_dxD7dtzmyEJIsUi53jFr0fXo/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/uD_dxD7dtzmyEJIsUi53jFr0fXo/1/da"><img src="http://feedads.g.doubleclick.net/~a/uD_dxD7dtzmyEJIsUi53jFr0fXo/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=7HJHyI_oeq4:FJu6-496rQ0:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=7HJHyI_oeq4:FJu6-496rQ0:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=7HJHyI_oeq4:FJu6-496rQ0:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=7HJHyI_oeq4:FJu6-496rQ0:F7zBnMyn0Lo" border="0"></img></a> </div>

Economic data point to a moderate pace of recovery
Economic data point to a moderate pace of recovery Primary concerns lie in employment and real estate Exit strategy will be dictated by economic and financial developments In the most recent FOMC meeting, participants concluded that recent data “confirmed that the economic recovery was likely to proceed at a moderate pace.” Furthermore, they believe that the financial market conditions continued to support economic growth. Nevertheless, their overall assessment remained cautious and <p><a href="http://feedads.g.doubleclick.net/~a/mfwohHTGDCMD3nK45yX27njA8OI/0/da"><img src="http://feedads.g.doubleclick.net/~a/mfwohHTGDCMD3nK45yX27njA8OI/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/mfwohHTGDCMD3nK45yX27njA8OI/1/da"><img src="http://feedads.g.doubleclick.net/~a/mfwohHTGDCMD3nK45yX27njA8OI/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=IO04-Jb7IYk:aSR43CpKsEI:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=IO04-Jb7IYk:aSR43CpKsEI:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=IO04-Jb7IYk:aSR43CpKsEI:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=IO04-Jb7IYk:aSR43CpKsEI:F7zBnMyn0Lo" border="0"></img></a> </div>

Bernanke Testifies Before Congress
In testimony today’ Fed Chairman Bernanke said that the Fed will begin monetary tightening when the economy improves, but that the sequencing of the actions has not yet been decided. However, the Fed will move before there is a full scale recovery. “We will not be able to wait until things are back to normal” before starting to raise rates, but that the Fed will “make sure the economy is on a sustainable growth path” before they will act. Bernanke said that the Fed takes both sides of its dual <p><a href="http://feedads.g.doubleclick.net/~a/ZaToTU5JNsZB7LW1WTJ6Zqu3WAQ/0/da"><img src="http://feedads.g.doubleclick.net/~a/ZaToTU5JNsZB7LW1WTJ6Zqu3WAQ/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/ZaToTU5JNsZB7LW1WTJ6Zqu3WAQ/1/da"><img src="http://feedads.g.doubleclick.net/~a/ZaToTU5JNsZB7LW1WTJ6Zqu3WAQ/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=Ba2e5567y1w:HDH0jcpWAJE:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=Ba2e5567y1w:HDH0jcpWAJE:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=Ba2e5567y1w:HDH0jcpWAJE:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=Ba2e5567y1w:HDH0jcpWAJE:F7zBnMyn0Lo" border="0"></img></a> </div>

Swiss Franc Extends Gains vs. Euro, No SNB Intervention
The Swiss Franc continued to gain on the Euro in Wednesday’s trading, extending a week of very strong gains already. The EUR/CHF pair, which has been sticking to very tight trading ranges recently has seen a sharp increase in volatility once it managed to break below the 1.46 level and in the wake of the Swiss National Bank interest rate meeting. SNB Upgrades Outlook And Says Will Act to Prevent Appreciation of Franc Last Thursday, the Swiss National Bank concluded its meeting where it <p><a href="http://feedads.g.doubleclick.net/~a/ciHZwrLzZl4WBGek1_yiiZNogoY/0/da"><img src="http://feedads.g.doubleclick.net/~a/ciHZwrLzZl4WBGek1_yiiZNogoY/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/ciHZwrLzZl4WBGek1_yiiZNogoY/1/da"><img src="http://feedads.g.doubleclick.net/~a/ciHZwrLzZl4WBGek1_yiiZNogoY/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=eXRmBbCoHps:ysPhnts0plo:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=eXRmBbCoHps:ysPhnts0plo:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=eXRmBbCoHps:ysPhnts0plo:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=eXRmBbCoHps:ysPhnts0plo:F7zBnMyn0Lo" border="0"></img></a> </div>

Fed funds rate remained at 0-0.25%
Fed funds rate remained at 0-0.25% Outlook for the labor market and business spending improved FOMC will follow the previously announced schedule to winddown remaining liquidity support programs Changes to the statement from today’s FOMC meeting reflect a more positive economic outlook. One of the most significant changes was the view of the labor market. The statement stated that, “the labor market is stabilizing,” rather than, “deterioration in the labor market is abating.” Furthermore, in <p><a href="http://feedads.g.doubleclick.net/~a/aFTg-_nz6B9LnMW0fdW9pA2ncgA/0/da"><img src="http://feedads.g.doubleclick.net/~a/aFTg-_nz6B9LnMW0fdW9pA2ncgA/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/aFTg-_nz6B9LnMW0fdW9pA2ncgA/1/da"><img src="http://feedads.g.doubleclick.net/~a/aFTg-_nz6B9LnMW0fdW9pA2ncgA/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=Mf6XrfCgmPI:5aWGNeLz8KY:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=Mf6XrfCgmPI:5aWGNeLz8KY:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=Mf6XrfCgmPI:5aWGNeLz8KY:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=Mf6XrfCgmPI:5aWGNeLz8KY:F7zBnMyn0Lo" border="0"></img></a> </div>

ECB will not hike before early 2011
Given that the ECB has announced that it will keep full allotment in place at its weekly main refinancing operations and at its 1-month auctions until October we think that a hike in November 2010 is too early and we thus move our projection of a first hike to Q1 2011. The ECB is heading towards the exit at a slow pace The ECB announced last Thursday at the ECB Governing Council meeting that the 3-month auctions will be with fixed allotment from now on (see ECB meeting: A slow normalisation ). <p><a href="http://feedads.g.doubleclick.net/~a/h4G1IrquC52yTwGhQafhiQuaKrk/0/da"><img src="http://feedads.g.doubleclick.net/~a/h4G1IrquC52yTwGhQafhiQuaKrk/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/h4G1IrquC52yTwGhQafhiQuaKrk/1/da"><img src="http://feedads.g.doubleclick.net/~a/h4G1IrquC52yTwGhQafhiQuaKrk/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=rPJ1GErPZIA:EW1AHW7tnco:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=rPJ1GErPZIA:EW1AHW7tnco:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=rPJ1GErPZIA:EW1AHW7tnco:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=rPJ1GErPZIA:EW1AHW7tnco:F7zBnMyn0Lo" border="0"></img></a> </div>

ECB Holds Rates Steady, But Makes Moves to Tighten Monetary Policy
The ECB is in the middle of a tough balancing act as it is attempting to lay the groundwork for mopping up extra liquidity in the banking system while still maintaining favorable lending conditions and dealing with the fallout from the Greece debt situation. Some Steps to Tighten Monetary Policy “The Eurosystem continues to provide liquidity support to the banking system of the euro area at very favorable conditions,” Trichet said. It will still lend as much money as needed through its <p><a href="http://feedads.g.doubleclick.net/~a/5bRxFlIDPmZBfrL0h6Mr_9lTehM/0/da"><img src="http://feedads.g.doubleclick.net/~a/5bRxFlIDPmZBfrL0h6Mr_9lTehM/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/5bRxFlIDPmZBfrL0h6Mr_9lTehM/1/da"><img src="http://feedads.g.doubleclick.net/~a/5bRxFlIDPmZBfrL0h6Mr_9lTehM/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=I3qjY8nnaCw:DGFfHfaLrb4:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=I3qjY8nnaCw:DGFfHfaLrb4:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=I3qjY8nnaCw:DGFfHfaLrb4:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=I3qjY8nnaCw:DGFfHfaLrb4:F7zBnMyn0Lo" border="0"></img></a> </div>

ECB meeting: A slow normalisation
The ECB’s weekly main refinancing operations and the one-month auctions will continue to be with full allotment at least until 12 October 2010. That the ECB promised to give full allotment for such a long period was today’s big surprise. For the three-month auctions the ECB is moving to fixed allotment. The last 6-month auction will be at a rate indexed to the refinancing rate. This will not matter much though, as the refinancing rate is expected to remain unchanged for at least 6 months. The <p><a href="http://feedads.g.doubleclick.net/~a/mb_VGMAxj6LNPjFvHYLrhB_ZM1o/0/da"><img src="http://feedads.g.doubleclick.net/~a/mb_VGMAxj6LNPjFvHYLrhB_ZM1o/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/mb_VGMAxj6LNPjFvHYLrhB_ZM1o/1/da"><img src="http://feedads.g.doubleclick.net/~a/mb_VGMAxj6LNPjFvHYLrhB_ZM1o/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=4GVMbYPustQ:I9B9WzdbEw8:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=4GVMbYPustQ:I9B9WzdbEw8:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=4GVMbYPustQ:I9B9WzdbEw8:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=4GVMbYPustQ:I9B9WzdbEw8:F7zBnMyn0Lo" border="0"></img></a> </div>

Semiannual Monetary Policy Report to the Congress
The timing of the exit strategy will be determined to economic and financial developments Economic slack, subdued inflation trends and stable inflation expectations support maintaining low rates for a prolonged period The Fed remains committed to transparency, but will ensure that monetary policy remains insulated from political pressures Bernanke reinforced the message that rates will stay low for an extended period in today’s semiannual report to Congress. While his comments on the economic <p><a href="http://feedads.g.doubleclick.net/~a/kegfjja0Gj6HVMcpX4hVV_8hVFQ/0/da"><img src="http://feedads.g.doubleclick.net/~a/kegfjja0Gj6HVMcpX4hVV_8hVFQ/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/kegfjja0Gj6HVMcpX4hVV_8hVFQ/1/da"><img src="http://feedads.g.doubleclick.net/~a/kegfjja0Gj6HVMcpX4hVV_8hVFQ/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=lTAEppHTRXQ:2HQ-Hi8dQfM:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=lTAEppHTRXQ:2HQ-Hi8dQfM:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=lTAEppHTRXQ:2HQ-Hi8dQfM:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=lTAEppHTRXQ:2HQ-Hi8dQfM:F7zBnMyn0Lo" border="0"></img></a> </div>

Bernanke Testimony Before Congress
In testimony before the House Financial Services Committee Fed Chairman Bernanke told legislators that the economic recovery is not yet on a sustainable path, and that the Fed’s near zero interest rates are still needed. The Fed sees the economy expanding between 3.0% and 3.5% this year and between 3.5% and 4.5% in 2011, but Bernanke noted that the strong growth in the latter half of 2009 was fueled by temporary factors and that the unemployment rate is seen falling only slowly, to around 7% <p><a href="http://feedads.g.doubleclick.net/~a/Dxp63kSHyfdpE_1BiQvuQvpjQ7s/0/da"><img src="http://feedads.g.doubleclick.net/~a/Dxp63kSHyfdpE_1BiQvuQvpjQ7s/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/Dxp63kSHyfdpE_1BiQvuQvpjQ7s/1/da"><img src="http://feedads.g.doubleclick.net/~a/Dxp63kSHyfdpE_1BiQvuQvpjQ7s/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=B-w-wRFP2vI:KeFbcHQWJ2E:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=B-w-wRFP2vI:KeFbcHQWJ2E:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=B-w-wRFP2vI:KeFbcHQWJ2E:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=B-w-wRFP2vI:KeFbcHQWJ2E:F7zBnMyn0Lo" border="0"></img></a> </div>

BOE King Sees Headwinds as Euro-zone Recovery "Stalls"
The Pound came under pressure overnight following testimony by Bank of England Governor Mervyn King in which he said the UK economy faces a new threat: the risk of a weaker-than-expected recovery in the Euro-zone. The BOE had factored in higher exports and an increase in net trade as domestic demand faltered, mainly on the back of a weaker Pound. However those gains have not materialized, though King expected then to “in due course.” One problem is that, according to King, the Euro-zone <p><a href="http://feedads.g.doubleclick.net/~a/0shcB44WvaSN1jmD439MfipMH5A/0/da"><img src="http://feedads.g.doubleclick.net/~a/0shcB44WvaSN1jmD439MfipMH5A/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/0shcB44WvaSN1jmD439MfipMH5A/1/da"><img src="http://feedads.g.doubleclick.net/~a/0shcB44WvaSN1jmD439MfipMH5A/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=swm4shwaILs:bfp0sb-0qro:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=swm4shwaILs:bfp0sb-0qro:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=swm4shwaILs:bfp0sb-0qro:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=swm4shwaILs:bfp0sb-0qro:F7zBnMyn0Lo" border="0"></img></a> </div>

FOMC Minutes from January 26-27, 2010
Downside risks to recovery have diminished “a bit further” Labor market weakness remains a major concern Target rate will remain at 0%-0.25% for an extended period FOMC participants’ economic outlook remains unchanged from the previous meeting. They believe that recent economic data is, “in line with the expectations for moderate growth and subdued inflation in 2010 that they held when the Committee met in mid-December.” Furthermore, financial conditions continue to support economic growth. In <p><a href="http://feedads.g.doubleclick.net/~a/Z9WgqNCZDXnZdYj3-rHOO5tgXEM/0/da"><img src="http://feedads.g.doubleclick.net/~a/Z9WgqNCZDXnZdYj3-rHOO5tgXEM/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/Z9WgqNCZDXnZdYj3-rHOO5tgXEM/1/da"><img src="http://feedads.g.doubleclick.net/~a/Z9WgqNCZDXnZdYj3-rHOO5tgXEM/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=YGMM50bYRyk:9PWWy0wOS3g:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=YGMM50bYRyk:9PWWy0wOS3g:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=YGMM50bYRyk:9PWWy0wOS3g:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=YGMM50bYRyk:9PWWy0wOS3g:F7zBnMyn0Lo" border="0"></img></a> </div>

Bernanke Signals Fed May Raise Discount Rate
In testimony before the House Financial Services Committee, Bernankesaid that the outlook for monetary policy has not changed since theFOMC January meeting, and reiterated that low rates are warranted “foran extended period.” Bernanke said “”the economy continues to requirethe support of accommodative monetary policies. However, we have beenworking to ensure that we have the tools to reverse, at the appropriatetime, the currently very high degree of monetary stimulus.” Fed Targets <p><a href="http://feedads.g.doubleclick.net/~a/JHcP9aCxBLpf8xsehE2En48q84A/0/da"><img src="http://feedads.g.doubleclick.net/~a/JHcP9aCxBLpf8xsehE2En48q84A/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/JHcP9aCxBLpf8xsehE2En48q84A/1/da"><img src="http://feedads.g.doubleclick.net/~a/JHcP9aCxBLpf8xsehE2En48q84A/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=A4HvxLPz_KU:rIwADanKadk:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=A4HvxLPz_KU:rIwADanKadk:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=A4HvxLPz_KU:rIwADanKadk:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=A4HvxLPz_KU:rIwADanKadk:F7zBnMyn0Lo" border="0"></img></a> </div>

Bernanke outlines exit strategy tools
The interest rate on reserves could replace the fed funds rate as the primary monetary policy tool until conditions normalize The timeline will be dictated by economic and financial developments Bernanke outlined the tools available to the Federal Reserve to manage interest rates and reduce the large quantity of reserves held by the banking system in a testimony before the House Committee on Financial Services. Bernanke addressed the possibility of communicating monetary policy through the <p><a href="http://feedads.g.doubleclick.net/~a/19FxeXMevb20aJe9m4h37Jm-Xx0/0/da"><img src="http://feedads.g.doubleclick.net/~a/19FxeXMevb20aJe9m4h37Jm-Xx0/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/19FxeXMevb20aJe9m4h37Jm-Xx0/1/da"><img src="http://feedads.g.doubleclick.net/~a/19FxeXMevb20aJe9m4h37Jm-Xx0/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=KDxEvg1O_yc:Lqf9tI3UUIA:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=KDxEvg1O_yc:Lqf9tI3UUIA:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=KDxEvg1O_yc:Lqf9tI3UUIA:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=KDxEvg1O_yc:Lqf9tI3UUIA:F7zBnMyn0Lo" border="0"></img></a> </div>

FOMC December 16th 2009
Economic and financial conditions improve Fed maintains its outlook of low inflation In this environment, Fed funds are likely to remain low for a prolonged period As in previous statements, FOMC members consider that “economic activity is likely to remain weak for a time”. However, Fed continues to improve its assessment on the economic outlook and made three major changes to the economic activity paragraph in its latest statement. The first one indicates that “Financial market conditions <p><a href="http://feedads.g.doubleclick.net/~a/G-nDUcCDrO1SbJOyZw7n5Yb8iQ4/0/da"><img src="http://feedads.g.doubleclick.net/~a/G-nDUcCDrO1SbJOyZw7n5Yb8iQ4/0/di" border="0" ismap="true"></img></a><br/> <a href="http://feedads.g.doubleclick.net/~a/G-nDUcCDrO1SbJOyZw7n5Yb8iQ4/1/da"><img src="http://feedads.g.doubleclick.net/~a/G-nDUcCDrO1SbJOyZw7n5Yb8iQ4/1/di" border="0" ismap="true"></img></a></p><div class="feedflare"> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=e6NbkOSYVI4:_X0uolmhELM:yIl2AUoC8zA"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=yIl2AUoC8zA" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=e6NbkOSYVI4:_X0uolmhELM:qj6IDK7rITs"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?d=qj6IDK7rITs" border="0"></img></a> <a href="http://feeds.fxstreet.com/~ff/fundamental/interest-rates?a=e6NbkOSYVI4:_X0uolmhELM:F7zBnMyn0Lo"><img src="http://feeds.feedburner.com/~ff/fundamental/interest-rates?i=e6NbkOSYVI4:_X0uolmhELM:F7zBnMyn0Lo" border="0"></img></a> </div>