Fed fighting

September 13, 2016

Friday proved to be a rather uncomfortable end to the week for most markets, with increased nervousness regarding Fed policy resulting in losses in equities, a sell-off in bonds and a sharp increase in implied volatility in both equities and also FX. Once again, there appears to be a fight in play, between a Fed keen to raise interest rates and a market far more sceptical of it happening. Currently, the market places a 30% probability of the Fed putting up rates next week. Today sees the final speech from a Fed official before the meeting, with Brainard due to speak early during the European meeting. Traditionally, she’s perceived to be on the dovish side, but there is some thinking among Fed watchers that she could be used to shift market thinking more towards a tightening. So there are volatility risks on the dollar later today.

For now, the dollar is starting the week on a slightly softer footing and more so against the yen, with talk in some quarters of the BoJ moving away from ‘shock tactics’ of the past. Equities followed through on the Friday session’s weakness during the Asia session, with that also being reflected during the European session. We’re likely to be in a waiting game ahead of the Fed speech later today, with nothing major on the data calendar to provide a distraction before Brainard’s speech at 17:15 GMT.

Publication source
FxPro information  FxPro reviews

October 24, 2016
A volatile week ahead
Global stocks were resilient last week Friday with major arenas clawing back gains following the upbeat corporate earnings and stabilising oil prices which revived risk appetite...
October 24, 2016
Gold prices edged lower
Gold prices traded mixed on Friday. The yellow metal traded lower the half of the day and higher the other half. Sellers moved the price to the level 1260 dollar per ounce which appeared a solid barrier for it. The pair bounced from the level and reversed some of its losses...
October 24, 2016
Earnings and Macro data to drive financial markets the week ahead
A pretty robust U.S. corporate announcements last week indicated that there’s a high chance for corporate America to get out of a profit recession which lasted for five consecutive quarters...

FBS Rating
Vantage FX Rating
FXTM Rating
Larson&Holz IT Ltd Rating
HotForex Rating
Tickmill Rating

OptionFair Rating
OptionBit Rating
24option Rating
OptionsXO Rating
IQ Option Rating
Grand Option Rating