Creeping towards a December hike

19 November, 2015

The minutes to the end of October Fed meeting, released last night, did not have a major market impact, but did reveal some fairly detailed discussion about the language to be used in the statement and the extent to which it should lead market thinking into a December move. The dollar wobbled, but was net-net little changed. In the bigger picture, the one thing the Fed has stressed is the nature of the tightening cycle and moving this more towards the market thinking in their projections. What could be just as important as the move is the strength of the forward guidance on further hikes, as the Fed wants to ensure that expectations do not run away for 2016. This would risk powering another major dollar rally and risk of a reversal of a December hike in 2016.

Elsewhere in FX, the Aussie has been holding up notably well over the past week of dollar strength against both the majors and emerging markets. The yen can also do well into year end, pushing EURJPY down through the 130 level and below. The structural forces pushing the yen lower are dissipating and it appears that the BoJ does not have the appetite for more QE, with policy kept on hold overnight. Note that South Africa has a rate decision today, where there is risk that rates could rise, in part as a means to try and curtail the weaker currency.


Source link  
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...

US-China trade talks: deadline postponed

China's blue-chip index jumped more than 6% on Monday morning on news that Trump would postpone of the tariff's introduction. The U.S. President...

  


Share it on:   or