Fed keeping options open

29 July, 2015

The two-day FOMC meeting concludes today with the focus on the statement released at 18:00 GMT. There is no real anticipation that policy will be changed, but the focus will be on the extent to which the statement indicates a tightening to come and possibly as early as September. Bear in mind that when the Fed dropped the phrase “considerable period” (in relation to how long rates will be kept low) back in January of this year, they were stepping back from offering more structured forward guidance. As such, it would be surprising if they offered specific guidance indicated a near-term move, especially given the recent developments in global stock markets. The dollar has been in retreat in recent sessions against selected majors, but still gaining vs. most emerging market currencies.

The overnight session has been relatively subdued. We are seeing the kiwi higher on the back of the latest comments from RBNZ Governor Wheeler, who suggested the pace of easing would be more subdued than the market was anticipating. This allowed the kiwi to move back above the 0.67 level, with AUDNZD briefly touching the 1.09 level. As with the RBA in Australia, he continues to believe his currency is overvalued, but the markets currently choosing to brush this view under the carpet. We’ve seen some stability in Chinese stocks overnight, which has supported a more stable tone to stock markets in Asia. The dollar’s more recent downward reversal against the commodity currencies has also continued, USDCAD moving back below the 1.30 level, whilst the Aussie has recovered from the year’s low made earlier in the week at 0.7257.


Source link  
Divergence Between Fed and BoJ

The March FOMC meeting will be held for two consecutive days from today. The interest rate decision will be announced at 18:00 GMT on Wednesday 15th March...

Market Volatility Expected Ahead of President Trump's Speech

In a speech that will be watched by millions of viewers in the United States and around the world, the President is expected to speak of his presidency and address pressing issues like his plans for health care, the tax system, the military, and his goals for his administration...

Gold Trades Below Resistance Ahead of the Fed and NFP

We will see the release of the US ISM Manufacturing PMI, and ISM Prices Paid for January, at 15:00 GMT on Wednesday 1st February...


Sterling Struggles Ahead of Theresa May's Speech

Theresa May will make a speech outlining her plans for Brexit tomorrow, Tuesday 17th Jan, before the UK triggers Article 50 to leave the EU...

Dollar Turn-around on Trump's Press Conference

President Elect Trump's first press conference after his victory in the US presidential election, was held yesterday around at 16:00 GMT. It has caused great volatility to the dollar and the markets...

Gold Nears Major Resistance Ahead of Trump’s Press Conference

Gold prices have rebounded since mid-Dec after testing the significant support line at 1120. On the 4 hourly chart, gold bullish momentum has been strengthened since the beginning of this year, helped by the dollar retracement...


Searching for a new narrative

Popcorn at the read today as President elect Trump has a scheduled news conference later in the day (around 16:00 GMT). Markets have become used to listening to him in 140 characters or less over the recent weeks, so a more elongated narrative should be welcome...

The sterling conundrum

Yesterday's early weakness in sterling, on the back of the latest comments from PM May surrounding Brexit, took cable close to key support levels and the resilience seen through most of the post US election period has been unwound...

Selling into USD strength

In summary, Friday US jobs report was pretty much in line with expectations, although the slightly better data on earnings gave some support to the dollar into the end of the week. As a result, the US currency was little changed from Tuesday opening levels...

  


Share: