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  
CB meetings dominate the week

With no impactful economic data releases on the calendar today, the markets are focusing on a plethora of Central Bank meetings scheduled...

No Surprises from BoC & ADP

In an unsurprising move, the Bank of Canada decided to hold its benchmark lending rate at 1%, after two small hikes earlier in 2017. The BoC stated...

Moderate Gains for USD

On Monday, the US Commerce Department released Factory Orders data for October, indicating that the continued strength in the Manufacturing...


OPEC Extends Output Cuts

On Thursday, OPEC (Organization of Petroleum Exporters) and non-OPEC producers led by Russia agreed to keep output cuts until the end of 2018...

US Economy Expands Faster Than Predicted

Data released on Wednesday showed that the US economy expanded at its quickest pace since 2014 in Q3. The US Commerce Department said that...

Political Turmoil in Germany Hurts EUR

The EUR lost ground against many of its peers on Monday on news that Chancellor Angel Merkel’s efforts to form a coalition government had collapsed...


USD Suffers on Subpoena News

The Trump Administration is back in the spotlight with news of a report that Special counsel Robert Mueller’s investigators have issued a subpoena...

Positive data negated by tax plan opposition

The US Labor Department released data on Wednesday showing the consumer price index edged up by 0.1% in October after climbing by 0.5%...

Data Boosts EUR Can CPI Boost USD?

EUR received a boost on Tuesday, as data from Destatis showed German Preliminary GDP climbed to 0.8% in Q3, beating forecasts of 0.6%. In addition...

  


Share: