Wednesday, November 28, 2012

No Santa Rally?

               US mkts bumped around overnight and slipped back into negative territory in a volatile session as ongoing worries over the looming "fiscal cliff" trumped a batch of positive eco reports and optimism over the Greek deal. Short term (with Greece given some more breathing space) mkts remain at the whim of Fiscal Cliff sentiment.

               This headline caused the Dow to drop 50bps quickly - * REID `DISAPPOINTED' WITH `LITTLE PROGRESS' IN DEBT TALKS* and helping pare gains earlier was comments from Fed Bank of Dallas President Richard Fisher said he advocates limits on quant easing. Fisher said in a speech today in Berlin that the U.S. central bank could “pursue a different course” and announce “a limit as to how much we are going to acquire of treasuries and mortgage-backed securities, say up to a limit of X, up to a point where our balance sheet reaches that.”

               The OECD has slashed its forecast for growth in 2013 and warned that the risk of a serious global recession cannot be ruled out. In its economic outlook, published on Tuesday, the OECD said it expected growth of 1.4% next year in the group of 34 economies that make up the membership of the Paris-based organisation – down from 2.2% forecast in May – and called for several of its members to step up their policy response.