Clawing for signs from the Fed

19 August, 2015

FX and other markets seem to have become less excited by the Fed in the past two weeks or so. The polls of institutions still show expectations positioned for a Fed hike next month, but the pricing in markets has become less convinced and this can also be seen in the latest dollar price action. The latest oil price developments have been playing a part and feeding into forward indicators of inflation. In the background is the global environment, which has become a more significant factor for the Fed in the past couple of years. We could get more on this front this evening from the latest Fed minutes for the end of July meeting. There were only subtle changes to the statement at that time, but at the margin, they did strengthen the perception that the Fed were gearing up for easing rates. Any dollar up-move on the release of minutes today is likely to be short-lived, given the subsequent developments that have largely undermined the easing case. Ahead of the Fed minutes this evening will be CPI data in the US, with a nudge higher from 0.1% to 0.2% on the headline rate, with core inflation seen steady at 1.8%.

As we mentioned yesterday, we’ve seen a decline in volatility over recent weeks and that has continued overnight, with relatively tight ranges on the majors. Beyond the majors, emerging market currencies continue to face pressure, especially those reliant on overseas capital who are seen as having a continued tough time as the Fed tightens policy. The South African rand has been under particular pressure in this regard, close to breaking the 13.00 level on USDZAR.


Source link  
Markets recover after the drop

The markets decline on investors' fears that trade conflicts will drag on and slow down demand, and this dynamic coincided with breaking through important...

Markets pressured by Huawei problem

Alphabet and some other American IT companies have suspended business with Huawei, which is one of the first examples of major consequences for...

The climate is changing rapidly

British people need to fly less, drive electric cars, eat little meat and turn their home thermostats down to 19 degrees Celsius (66 Fahrenheit) in order to rein...


Chinese stocks saw their worst week

Chinese stocks have taken investors on a ride this year. Shanghai and Shenzhen have been the best performing global markets this year, with the Shanghai...

Risk-sensitive currencies on the rise

Stock markets show growth after the release of strong data for China and Japan as their respective PMIs were better than expected which supported...

Trump again puts pressure on OPEC

President Donald Trump told OPEC on Thursday that its members should start pumping more oil, marking his second warning to the producer group this year...


Turkish lira fell by 5% before elections

The Turkish lira dropped by as much as 5 percent against the dollar on Thursday morning, as the country gears up for elections this weekend. The greenback...

May won't ask for a long Brexit delay

Prime Minister Theresa May won't ask the European Union for a 'long' delay to the Brexit deadline, her office said, after pro-Brexit ministers objected...

Demand for safe assets grows

Markets remain under moderate pressure, despite the Fed comments. Powell's semi-annual speech in Congress reinforced expectations that the US Central Bank...

  


Share it on:   or