Fretting over the Fed

11 September, 2015

The dollar was in retreat in the latter stages of yesterday, to levels last seen at the early part of the month (at least on the dollar index), with most of the gains coming against the euro and Aussie dollar. Sterling was also buoyed by the fact that we saw rates on hold and one member still voting for higher rates, whereas there were some thoughts that we would see that one member fall back into line with the majority. For today, we have just PPI inflation data in the US to look at come 12:30 GMT, but we are unlikely to see markets get overly excited by that.

We are getting into the home stretch with regards to the outcome of the September FOMC meeting, the result of which will be known Thursday of next week. The volatility of stocks markets has calmed down in recent sessions, but the Fed has to look a lot further that then day to day volatility of financial markets when setting policy. Markets reflect the here and now, whereas policy is set for the coming year to 18 months, as its impact works with lags on the underlying economy. The continued downward pressure on global commodity prices is a factor that is likely to keep them from hiking rates come next week in my opinion, but opinions are divided, both in markets and on the FOMC itself. As such, the statement will be crucial in shaping the market reaction and determining whether a further easing will be priced for this year.


Source link  
Markets recede from the recent highs

A strong Nonfarm Payrolls caused pressure on the stock markets, reducing the chances of the interest rates lowering by the Fed in the upcoming months...

Gold resumes rally, pushing past $1400

Gold prices resumed a push higher on Monday, as flows into the precious metal continued on improved prospects for easier monetary policy from...

Gold rises as markets slip

Market caution continues to support gold. Quotes of this metal rose to $1337, repeatedly trying to push above this year highs at the 1340-1360 area...


Trump says Brexit should happen

President Donald Trump promised the U.K. a "phenomenal trade deal" Tuesday, on the second day of his state visit to Britain...

Euro and Gold instead of Dollar

Gold rose on Monday to the highest levels since February, reaching $1327 per ounce. In the first hours of the Tuesday trading session, there...

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...

  


Share it on:   or