Investors waiting for inkling from the Fed

15.31 AEST, Wednesday 29 August 2012

Investors waiting for inkling from the Fed

By Tim Waterer (Senior Trader, CMC Markets)

Watching financial markets this week has been a little like watching grass grow, such is the reserved nature of investors until we get an inkling from Bernanke about the prospects of September stimulus from the Fed.

Equity markets are at a crossroad, with a push higher on hold until we see what goes down at Jackson Hole over coming days. Inclination of further stimulus will see global equity markets step higher, however signs of reluctance to inject quantitative easing would likely be met with a dejected response from risk assets.

The Euro has been a beneficiary of traders filling in the blanks when it comes to why Mario Draghi won’t be at the central bank symposium. Traders have interpreted that something big must be in the works if he is giving Jackson Hole a miss and this has provided a shot in the arm to the single currency.

The Australian market did little more than twiddle its thumbs again today, with traders still in ‘pause’ mode ahead of the Jackson Hole events. A potential break higher to 4400 is on hold until we see what comes of the central bank symposium in the States. Until then it is pretty much a case of ‘watch this space’.

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