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Operation Twist 2 Would Be Better, But We'll Probably Get QE3 Instead
Read more: http://articles.businessinsider.com/2012-03-07/markets/31130926_1_fed-governors-fed-action-chairman-bernanke#ixzz1t3e0Q4bU
With European bond yields continuing to decline and bond spreads throughout Europe compressing, the euro broke the top side of its 2.5 week range, rising to an intraday high of 1.3236 against the U.S. dollar. Despite weaker than expected U.S. durable goods, risk appetite is holding steady ahead of this afternoon's FOMC announcement.
http://www.fx360.com/?et_cid=21292831&et_rid=wallstreet1928@gmail.com
Expectations vary as to the figure that markets are looking for, but anything between 0.1% and 0.3% is likely to see a fairly muted reaction in line with expectations. Zero growth or a negative number could well see a sharp sterling sell off after the gains of recent weeks.
http://www.cmcmarkets.co.uk/blog/posts/currency/uk-gdp-and-fomc-main-focus-today
Most economists polled by Reuters think Britain will scrape through with gross domestic product growth of 0.1 percent or slightly more in the first three months of this year, but a sizeable minority see a slight contraction.
http://uk.reuters.com/article/2012/04/25/uk-britain-economy-idUKBRE83N1GX20120425
The markets are floating around the flat line. All eyes are focused on the after market earnings release from Apple Inc. (NASDAQ:AAPL) and the FOMC policy statement scheduled for Wednesday. This is keeping investors very nervous as worries of an iPhone sales miss is looming large. In addition, the markets are looking for Ben Bernanke to give a hint at future quantitative easing once again. The Wall Street thought process is that more problems in Europe and weaker U.S. economic data might push Bernanke into saying QE3 is a possibility again.
The SPDR S&P 500 ETF (NYSEARCA:SPY) is trading at $137.19 +0.40 (+0.29%). Tomorrow will likely be a major up or down day as Apple earnings will be revealed and comments from the Federal Reserve will be given. Be ready for a wild ride.
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If the Fed increases their inflation and lowers their unemployment projections, the case for QE3 weakens significantly. As a result, we don’t expect the Fed or Bernanke to make it crystal clear that QE3 is necessary – the door is open but no one is ready to walk through it. At the end of the day, Federal Reserve officials are still very divided on monetary policy and given the level of market expectations, this means there is scope for a squeeze higher in the U.S. dollar after the FOMC announcement.
http://www.businessweek.com/articles/2012-04-09/to-qe3-or-not-to-qe3
Problems in Europe and a corruption scandal for Wal-mart, the world’s largest retailer sent currencies and equities sharply lower, the three central banks convening on monetary policies will most likely have more negative than positive things to say about the global economy. Their pessimistic comments combined with a continued focus on Europe will make it difficult for the EUR/USD 
and risk appetite to recover.
http://www.fx360.com/commentary/kathy/7451/beware-of-further-losses-in-forex.aspx
