Fed mixed signals

January 28, 2016

The recovery in risk assets was rather snuffled out after last night’s FOMC meeting which was dovish, but a little less dovish than many had previously hoped for. The reaction from the markets was mixed and unsurprisingly volatile as both equities and the dollar fell, however the greenback has recouped its losses overnight. When you look through these mixed movements what we do know is that since December the economic data has been rather on the soft side, but despite this it’s still likely that a second hike will come in March before a pause. The problem with this is that they don’t want to make the same error that the ECB made back in 2011 under Trichet when they raised rates twice rather inexplicably in a move which was arguably a contributor to the current deflationary pressures, as well as lower commodity prices. The market is still pricing in less aggressive tightening than the Fed is suggesting and perhaps yesterday was a first sign that the Fed is moving towards the same thinking as investors.

Today the focus will be on sterling as we see the first release of last year’s Q4 GDP, expected to come in at 0.5%, up from 0.4%, but the year on year is due to decline from to 1.9% from 2.1%. Sentiment towards the UK economy has been waning throughout January and GBPUSD has been on a downward spiral since the middle of 2015, rather like the stock market. Later in the day there’s European consumer confidence and then US durable goods.

Publication source
FxPro information  FxPro reviews

October 27, 2016
Sterling falls notwithstanding UK GDP
On Thursday, the British pound sagged against the greenback, notwithstanding data on third quarter growth showing that Britain’s economy shrugged off the immediate shock of the Brexit referendum...
October 27, 2016
Dollar falters but strength remains ahead of jam-packed week
The US dollar has taken a bit of a breather this week as it consolidates its recent gains ahead of major economic data and events in coming days. For around a month, the greenback has been on an exceptionally sharp incline as expectations for a Federal Reserve rate hike this year have progressively increased...
October 27, 2016
Oil slides on OPEC uncertainty
WTI Crude received a pummelling on Tuesday with prices sinking below $49.50 after reports displayed an inflated rise in U.S inventories which revived concerns over the excessive oversupply in the markets...

FIBO Group Rating
FXTM Rating
HotForex Rating
HYCM Rating
OctaFX Rating
Vantage FX Rating

OptionBit Rating
Beeoptions Rating
Banc De Binary Rating
OptionFair Rating
Grand Option Rating
365BinaryOption Rating