Magnificent Ben

Ben Bernanke speech yesterday has win over the markets and the positive vibes were hitting the markets even today. Nothing special in the speech, both bulls and bears had their moments, but as bulls are currently in  the lead the print was positive in all.

Interesting, Mr. Bernanke admitted influencing stock markets:

…Partly as the result of these and other policy actions, many parts of the financial system have improved substantially. Interbank and other short-term funding markets are functioning more normally; interest rate spreads on mortgages, corporate bonds, and other credit products have narrowed significantly; stock prices have rebounded; and some securitization markets have resumed operation. In particular, borrowers with access to public equity and bond markets, including most large firms, now generally are able to obtain credit without great difficulty. Other borrowers, such as state and local governments, have experienced improvement in their credit access as well…

Whole speech: Link. No word on exiting agency debt purchase program.

On economic announcement front today we had following releases: producer price index, treasury international capital and industrial production. PPI  rose 0.3% vs. 0.5% consensus and -0.6% reading last month. PPI  less food & energy on a monthly level fell -0.6% vs. 0.2% consensus and -0.1% reading last month. Net foreign purchases of U.S. long-term securities rose 40.7 billion USD in September vs. 28.6 billion USD consensus. Industrial production rose 0.1% vs. 0.4% consensus and 0.7% the month before. Capacity utilization rate came at consensus of 70.7% vs. 70.5% the month before.

All in all, prices are still deflating, the industrial production is still not recovering and foreigners are still buying USD denominated assets; all corroborating my short term view that treasuries and dollars should go up.

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This entry was posted on Tuesday, November 17th, 2009 at 4:33 pm and is filed under Markets. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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