Volatility in the monetary markets is believed to be a primary issue to be discussed by top officials from members of the G20 who are scheduled to meet in Moscow on Friday 19 July 2013. The convening of the heads of the various Finance Ministries and Central banks belonging to the association of global powers comes as a growing number of experts have expressed concern, expressing the need for a reduction in government involvement in stimulus activities.
Analysts assess that statements regarding attempts to enact changes in monetary policy that emerge from the G20 may have significant influence on currency trading as it will likely affect investor confidence, thus driving activities in the markets.
Bernake to Present Monetary Report in Congress
Federal Reserve Chairman Ben Bernake is scheduled to deliver his semi-annual report to Congress today 17 July 2013, giving the nation’s leaders a snapshot on the current state of the economy. In the lead up to the report, the dollar has enjoyed a run of success against the majority of its rival currencies, in spite of a rise in the CPI and lower than expected Advanced Retail Sales numbers.
In his report, Bernake is likely to discuss a perceived rise in the housing markets as well as addressing the Fed’s massive quantitative easing measures that have been in place as a buffer for the American economy during the recession. While in previous statements Bernake has hinted at the possibility of reducing stimulus activities over the course of the coming year, he has also noted that he doesn’t believe that the economic indicators point to such an action at this time in light of the current employment statistics.
Analysts assess that the markets will likely be paying close attention to Bernake’s reports and will respond quickly and accordingly.Traders are advised to proceed with caution as there is a strong potential for market volatility following the release of his report.
Commodities Prices Drop Following Hot Streak
In the wake of a strong run for the prices of both gold and West Texas Intermediate crude in recent days, the pair of commodities have hit a wall, suffering from two days of losses as the markets have cooled.
As previously noted, the price of WTI shot up following concerns over continued supplies. The fall in prices are believed to have come as traders lost confidence in the long term sustainability of the current price structure, thus lowering their expectations. In the gold market, producers concerned over a looming annual loss in the price of futures have begun hedging, helping to spread the belief that the price of gold will continue to drop.
Traders can expect continued volatility in both of these markets as investors react to the cool down.