15.07.2014 - Traders anticipate the speech of the Fed Chairman
At the moment a lot of attention of the market is paid to speeches of the heads of central banks. Thus, in a statement yesterday Mario Draghi again noted that the euro is overvalued and hinders a sustainable recovery in the region. According to Draghi, the main stimulus for the growth of the euro area economy is domestic demand and inflation in the coming months will remain low. High unemployment also hampers the growth of GDP, but the risks for the region's economy decrease.
Today we should pay attention to the statement of Janet Yellen in the U.S. Congress. In her statement, the Fed chairman may indicate when to expect an increase in interest rates. After the publication of minutes of meetings of the previous meeting of the U.S. Federal Open Market it had become clear that the Fed is not in a hurry to raise rates, but Mrs. Yellen may announce new details today.
Due to the reduction of quantitative easing and the lack of new drivers for growth, we expect that the growth of U.S. indexes soon will stop and save midterm negative outlook.