Inflation still a concern for FOMC

29 October, 2015

Markets interpreted last night’s FOMC statement as an admission that a December rate hike is still very much a possibility allowing the dollar to bounce and overnight Asian equities have weakened meaning a softer open for indices is expected in Europe. On the back of the statement EURUSD fell sharply taking it back below 1.1000 for the first time since September and this morning it trades at 1.0940 with the next major support seen at 1.0800, where if we see a break below we are likely to see an increase in calls for parity. Between now and year end makes the economic data all the more important as to whether the Fed does actually commence tightening in December and we see the penultimate nonfarm payroll of 2015 next Friday where a figure of 177k is expected, still less than the desired 200k, but up from September’s 142k. As we discussed in yesterday’s note inflation is still a big worry for the Fed and whether in two years time it will be back towards their target as interest rates are on the rise. On balance I still don’t expect a rate hike from the Fed this year.

Today sees business and consumer sentiment from the Eurozone where a weak reading could put further pressure on EURUSD, but the main focus is US GDP data released at 12.30 GMT. Overnight the an interest rate decision from the BOJ could also provide some volatility ahead of tomorrow’s last session of the month.


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