Record rush on Wall Street

Dow Jones and S&P jumped to all time high and the technology heavy Nasdaq index reached the highest level since 2000, in the aftermath of the publishing of US Federal Reserve (FED) minutes and new statements by Chairman Ben Bernanke in Boston yesterday. EURO/USD which fall to 1.3208 Thursday morning recovered during the day, but dipped back to 1.31 following Bernanke’s strong commitment to keep interest rates at the present low level. It  trades at present at 1.3081.

Bernanke’s reiterated that the US economy is volatile.  The 7,6 % unemployment is far from FED’s 6,5 % target for the labour market. The jobless claim numbers for last week published yesterday were higher than previous week and confirm Bernanke’s soberness. The markets interpret his comments as a confirmation that a September tapering of monetary easing is not in the cards.  As several FED-members stressed in the June Minutes,  the bond buying program will continue into 2014.  This boosts stock markets and led to termination in stock short positions yesterday.

In Asia the Asian Pacific MSCI-index lost steam after three winning sessions ending up only 0,2 % as markets brace for Chinese GDP data early next week. China’s week foreign trade data for June provide a pessimistic edge to the second quarter estimates which probably will show that GDP has slowed further.  The government’s official forecast on 7,5 % economic growth set for 2013 might prove to be, too, optimistic.

After a 24 hours heavy  selloff in the dollar as investors cut bullish positions on Bernanke’s pledge, currency markets are steadier into the last trading day of the week. The dollar index, DXY, experienced its steepest fall in four years. Some analysts see the fall in the dollar as a buying opportunity on expectations of a FED autumn tapering on the presumption of US GDP growth in third and fourth quarters. Oil lost momentum when traders took profit following a three week rally that lifted prices to 15 month-high. US crude, NYMEX, eased back to USD 105 a barrel reaching 107,45.

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