Markets anxiously await Bernanke testimony

ForexNewsNow | Published on July 14, 2011 at 4:54 am

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Today’s major economic events will all take place in the United States and are likely to give an indication as to the strength of the US economy in wake of the ongoing EU sovereign debt crisis and US public debt debates.

  • Initial Jobless Claims – USA – 1:30 P.M., GMT

The Initial Jobless Claims is a weekly measure of the number of people who file for unemployment benefits for the first time during a given week. Last week, the Department of Labor announced figures (418K) that were better than expected (420K) and lower than the week before (432K). This week, the analysts forecast another improvement of the Initial Jobless Claims with the figure of 410K.

  • Retail Sales – USA – 1:30 P.M., GMT

The Census Bureau will release its monthly measurement of all goods sold by retailers based on a sampling of retail stores of different types and sizes in the country. In June, the retail sales were higher than expected for the first time since December 2010 with a decrease of 0.2%. This month, experts anticipate a number of 0.0%. A higher than expected reading should be taken as a sign of US economic recovery while a lower than expected reading could indicate growth continues to abate.

  • Fed Chairman Bernanke Testifies – USA – 3:00 P.M., GMT

Federal Reserve Chairman Ben Bernanke is to deliver the second part of his testimony on monetary policy in Washington, DC today. On Wednesday, Bernanke already declared that the central bank was ready to ease monetary policy further if the economy weakens and inflation moves lower.

“The possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risk might reemerge, implying a need for additional policy support,” Bernanke said.

Many have interpreted Bernanke’s comments as a sign that a “Quantitative Easing 3” program may be enacted soon in order to help move the US economy forward.

Bernanke also offered the Fed’s forecasts for June, which were already revised downward significantly from April.

According to John Kilduff, the founding partner of Again Capital LLC, a hedge fund in New York, “Bernanke is clearly indicating that he and the Federal Reserve are well pleased with the recently concluded quantitative easing regime and they stand ready to do more.”

 

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