Minutes FOMC & interesting informations (very important(!))

hello,

One of the interesting and often ignored by the market information is a change in property prices in Chinese cities. In October, the price dynamics in the primary market amounted to 12.4% y/y, while in the secondary market 16.4% (!), In both cases establishing records. It must be added that such a high price increase can not be explained by the base effect (it is even negative), which only underlines how unhealthy situation on the property market, which is responsible for about 15% of China's GDP (!). It is worth mentioning that one of the statements the party plenum was to accelerate the implementation of the property tax, which can lead to the bursting of the "bubble", and even a hard landing of the Chinese economy (in extreme circumstances of exceptional to the global recession). Therefore, the joy of the markets after the announcement of reforms, including setting up further the possibility of borrowing by local governments (officially, unofficially for a long time because they do) and loosening the one-child policy, it seems strongly myopic.

Night weakening of the dollar was caused statement of Ben Bernanke, who stated that:

◦ Fed is obliged to maintain a highly accommodative monetary policy as long as you need it.
◦ Interest rates may still remain around zero, even after the QE is completed. Perhaps even after the unemployment rate falls below 6.5%.
◦ The rate of decrease QE is not strictly defined. Everything will depend on the Fed's views on the economic situation in the U.S..

Very dovish comments ...

Economic data:

Core CPI in U.S. m/m actual: 0.1%; expect: 0.1%; previous: 0.1%

CPI in U.S. y/y actual: 1.0%; expect: 1.0%; previous: 1.2%

The ECB said today a very strong voice that can consider -0.1% rate of deposit if you need further loosening! <more info>

Bullard (FED) on Bloomberg TV: cutting QE3 "on the table" already at the next meeting:
◦ The economy looks much better than in recent years
◦ The only question is whether the growth rate as the last is maintainable in the long term
◦ to reduce the chance of QE3 next month (!)
◦ You can not compare the current situation in the markets for bubbles from the 90's and 2000

◦ Europe will come completely out of the recession in 2014
◦ I see a chance to grow more than 3% in the U.S. next year
◦ Lower limit of the inflation rate of 1.5% is justified
◦ Data for October very good
◦ I am not sure whether the Fed will reduce QE3 in December
◦ The increase in the stock markets are quite strong this year :)

Bloomberg: 5% of respondents expected to cut QE3 in December!

Reuters: Fed QE3 in March will reduce by $ 10 billion

Minutes FOMC: <more info>

Many members said that if the the data will be very good, QE will be limited in the coming months, some members pointed out that markets need to prepare for it in speeches.

Was a discussion about whether to enter the statement to say that the shutdown could mean problems for the recovery, but decided not to in order not to increase the problem.

Inflation consistently below 2% would be detrimental to the recovery in the U.S.

The Committee considered various options to strengthen forward guidance - but on a theoretical level - Lowering the deposit rate, the additional terms of the unemployment rate reached 6.5%, the lower limit for inflation etc.;

comments are welcome (always)

regards,
oscarjp