Inching towards a Fed tightening

30 July, 2015

The impression given by the Fed’s post meeting statement last night suggests a central bank inching towards a rate increase, with inching being the operative word here because the changes to the wording were indeed very subtle. But there will be an even greater focus on the jobs numbers going forward, given that the Fed has stated that it will be appropriate to raise rates “when it has seen some further improvement in the labour market and it reasonably confident that inflation will move back to its 2% objective”. So the data dependency has been given even more emphasis and conditionality. The dollar has strengthened on the back of the statement changes, with EURUSD briefly below the 1.0950 level during early European trade. Interesting to see EURJPY also lower, down to the 136.00 level.

The price action for today and tomorrow likely to be influenced by month end flows, which could make for some more choppy trading than usual. The further gains in stocks provides a comfort blanket around this, especially in light of the stabilization seen in the China index of late. Cable continues to act as the more interesting rate story play, as expectations and chatter regarding a BoE hike continues to surface, but a move this year still looks a long shot and the FX side looks to have run slightly ahead of the rate story, making cable potentially more vulnerable into month end.


Source link  
All Eyes on Central Banks

Markets were, for the most part, little changed on Wednesday as traders waited for today’s Bank of Japan and ECB rate decisions. Earlier today...

Dollar Bears

UK Consumer Price Index (CPI) data was released on Tuesday showing inflation easing for the first time in nearly 10 months, retreating from the near 4-year high touched in May...

More Record Highs for Equities?

Early indications from Asia this morning are pointing towards a strong day for global equities, continuing the momentum from last week...


US Data brings on USD bulls

U.S. job growth surged more than expected in June and employers increased hours for workers, with signs of a labor market strengthening that is likely...

Biggest Quarterly Drop in 7 Years

USD recovered marginally on Friday, but had its biggest quarterly decline against several currencies in nearly 7 years following hawkish signals...

Markets look to Central Bankers

Asian Equities traded higher on Tuesday approaching near two-year highs on Tuesday as USD strength helped exporters...


Global Economic Optimism Continues

Global equities moved higher on Monday as optimism continued to improve on global economic growth. However, USD...

BOJ Monetary Policy Remains Steady

The Bank of Japan maintained their monetary policy on Friday whilst upgrading their assessment of private consumption...

Final Confirmation for a June Rate Hike

The crucial US labour market data for May will be released today, June 2nd at 13:30 BST. It includes non-farm payrolls...

  


Share: