Hopes of further action by the US Federal Reserve to boost the country's economy have given a lift to stock markets.
In a speech to the National Association for Business Economics - not necessarily the most predictably market moving venue - Federal Reserve chairman Ben Bernanke warned the world's largest economy needed to grow more quickly to create enough jobs to bring down unemployment. That prompted hopes of continued low interest rates for some while, and also the prospect of more quantitative easing, something which had been fading recently. The key line seems to be:
Further significant improvements in the unemployment rate will likely require a more rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies.
Annalisa Piazza of Newedge Strategy said:
Bernanke remained extremely cautious on the development of the labour mkt, suggesting that the Fed will keep the current accommodation for a prolonged period of time.
That prospect has lifted US futures, with the Dow Jones Industrial Average now forecast to open up 86 points, and the European markets. The FTSE 100 is now up 42.44 points at 5897.33, while France's Cac is nearly 0.5% higher and Germany's Dax has climbed more than 1%.
