Confidence in the beleaguered credit markets seems to be slowly improving. With the Fed adding to its cumulative 325bps of easing last week and expanding its ad hoc efforts to revive liquidity, lenders are less fearful of a default and banks aren’t as apprehensive with taking on so-called risky assets that may be difficult to price and/or sell should there be another turn for the worse. Just this past week, the monetary policy authority has taken significant steps to squash the credit crisis once and for all. Adding to the already significant improvements to its lending facilities, the Fed announced it would increase its bi-weekly TAF auctions from $50 to $75 billion and further that it would now accept AAA-rated ABS as collateral. A potential long-term fix, Bernanke asked congress this morning to provide interest on commercial reserves.
[I]Be sure to join DailyFX Analysts in discussing the Watch What the Fed Watches latest report in the [/I][I]DailyFX Forex Forum[/I]
[B] Improving outlook[/B] means the Federal Reserve could use this indicator to
support a rate hike. The opposite stands for a deteriorating outlook.
[B]CREDIT MARKET: HOW IS IT DOING?[/B]
[B]A DEEPER LOOK INTO THE CHANGES THIS WEEK:[/B]
[B]FINANCIAL MARKETS: HOW ARE THEY DOING?[/B]
[B]A DEEPER LOOK INTO THE CHANGES THIS WEEK:[/B]
Though the general rise in stocks and other financial markets has been timid, the reduction in risk measures has not. Through the past week, gauges of volatility and interest behind hedging losses through options have eased significantly. The S&P 500 volatility index slipped to its lowest level since October of last year when it dropped below 19 percent. Reduced levels of expected market activity typically accompany a bullish move in the underlying. However, the put-call ratio was more reserved in its support as the indicator has yet to break a very prominent rising trend.
[B]U.S. CONSUMER: HOW ARE THEY DOING?[/B]
<strong style="">
[B]A DEEPER LOOK INTO THE CHANGES THIS WEEK:[/B]
