John Williams the President of the Federal Reserve Bank of San Francisco caused concern among investors after his comments that the Fed may start to cut back on its monetary easing program over the Summer and end monthly bond-purchasing towards the end of 2013. Many investors feel the US economy is not ready for this, as backed up by weak economic data releases in the US. This sent the European lows to open lower today.
Elsewhere worrying data came out of the Eurozone which is weighing on investor confidence. GDP data from the Eurozone showed a shrinking economy in the zone made up from 17 nations. A 0.2 per cent drop in GDP so far in March which means a yearly decline of 0.9 per cent.
Stocks
In Europe the EURO STOXX 50 fell 0.49 per cent while the French CAC 40 lost 0.37 per cent and the German DAX fell 0.32 per cent. US Stocks closed lower following the Fed‘s comment with the DJIA down 0.28 per cent, the S&P 500 closing 0.50 per cent down and the NASDAQ falling 0.18 per cent. Asian stocks were broadly lower in the overnight session. The Nikkei 225 in Japan dropped 0.27 per cent, The ASX 200 in Australia gained 0.21 per cent. Hong Kong remains closed for a national holiday.
Forex
The greenback was up against most of its currency partners in overnight session sparked by the Feds comments. It moved up against the JPY today getting close to its 4 ½ year highest level, the USD/JPY touched 1.257 in the European session. The EUR/USD slipped 0.10 per cent lower to 1.2870 close to 6 week lows.
Commodities
Gold prices which often inversely track the dollar crept 0.03 per cent down in the Asian session. Meanwhile natural gas had heavy losses after supply data showed an excess of natural gas. It lost 3.62 per cent. Oil crept down too as the price of the USD rose.
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The Federal Reserve To Cut Easing, Causes Jitters In The Market
Published 05/17/2013, 07:00 AM
Updated 05/14/2017, 06:45 AM
The Federal Reserve To Cut Easing, Causes Jitters In The Market
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