Americans Preparing the Markets For Take-Off

  President of the European Central Bank Jean-Claude Trichet announced at a press conference on Thursday that the Euro zone’s economic development will move at a much slower pace than had been predicted, while inflationary risks weakened for the medium term outlook. ECB economists revised their predictions on the Euro zone’s GDP growth downward. At the moment, ECB experts are expecting GDP growth in 2011 to be 1.4%-1.8%, although in June they had predicted 1.5%-2.3%; predictions on GDP growth for 2012 are currently 0.4%-2.2% versus June’s forecast of 0.6%-2.8% growth. Market players immediately took these announcements into consideration and directed them against the European currency, which lost more than 150 points against the US dollar after the start of the press conference.

RoyalMaxBrokers experts noted that, while Trichet didn’t tell the market what it wanted to hear, he also didn’t signal that the central bank would refrain from raising the interest rate in the future.

Trichet noted at the monthly press conference that the ECB sees “increased downward risks” for the Euro zone in conditions of “especially high uncertainty.”

In a speech which started at 3:00AM (Moscow Time), US President Barack Obama presented a $447 billion plan for jolting America’s economy into action. The president believes that the plan will give the economy immediate stimulation if Congress passes it swiftly. This plan “will provide impetus to the stalled economy and infuse companies with certainty that, if they invest their money, they will find buyers for their products and services.” Obama advised Congress, “you should immediately pass this plan to increase the number of jobs.”

Obama’s plan made provisions for lowering taxes on salaries for employees and companies as well as allocating money to repair roads and bridges and extending unemployment benefits. RoyalMaxBrokers analysts report that a more detailed report of the plan’s financing is to be presented later. In the upcoming week, the president should present a plan to reduce the budget deficit.

Quotes on gold, which just finished a two-day correction, are continuing to grow and are returning to their previous record highs. The cost per troy ounce has added more than $40 in a day and is trading at $1862/oz. Before Trichet’s, Bernanke’s, and Obama’s speeches, investors opted to refrain from buying risky assets such as stocks and commodities and instead turned their attention to gold.

Quotes on oil fell as a result of trading on Thursday, September 8. Investors, as already mentioned, tried not to risk before the important speeches, and therefore publication of data on commercial oil reserves in the US for the previous week led to only short-term growth to $90.23 per barrel on WTI, after which quotes slipped below $89. US commercial oil reserves dropped to 4 million barrels due to the recent hurricane and tropical storm restricting imports.

At 12:30PM (Moscow Time), the UK National Statistics Agency will report on inflation in the manufacturing sector. Analysts forecast lowered risks for the monthly dynamic.

At 4:00PM (Moscow Time), traders will assess the report on the condition of Canada’s labor market, which will be presented by STCA – Statistics Canada. The majority of analysts are of the opinion that this indicator will remain at 7.2%.