Major Market Mover: Readings… After Cut!

What’s done is done and the Feds took us all by surprise last night indeed with their drastic measures taken to ensure the wellbeing of their economy and anchoring the ghost of recession, taking their key rates to 4.75 percent and yet the Board of Governors took another 50 basis points off their discount rate…

The statement’s rhetoric did in fact as expected take desperate alteration as their focus on the ongoing correction in the housing market and credit squeeze that have the potential to restrain economic growth. Their dovish alteration didn’t at all withhold their constant watch on inflation, acknowledging the fact that it did moderate while the risks still remain; the committee judges that they need to thoroughly anticipate economic developments on ground and world wide as well.

The aftermath of the 50 basis points is still to be locked in the market and greenback has never looked weaker; today’s inflation readings come as the first sign after the decision and all is significant at this stage, for assessing the entire economic picture starts to build up form now.

Yesterday the PPI readings showed slowing especially on food and energy, while stability was seen on core levels. On the queue we have today the consumer counterpart and that is the CPI for August to come in flat on the month and slightly lower on the year at 2.2% from 2.4%; while on the core levels stability is expected with 0.2% on the month and 2.2 percent on the year.

The housing data is still the markets rich chocolate cake as today we also have key data that still defines the ongoing trend especially that they are the first on hand for the turmoil month, August. Permits are expected to have edged down further to 1345 thousand from 1373 K showing that the devastated sentiment in the housing sector is reflected yet further into futuristic expectations, and that is further downside trend; housing starts are also to have taken a hit sliding to 1350K from 1381 thousand. The initial readings for August such as the jobs report reflected the economic conditions have deteriorated massively and to that even those slowing expected readings on housing seem the brightest optimistic for now so the actual readings today might reflect some further damage.

Keep your senses with the market, as majors acquire massive bullish momentum against the dollar, and new records are about to be set in the markets that you don’t want to miss. All counts now and the jitters are fading away as common sense once again is arising to surface…