Fed Holds Rates for Now But...

21 September, 2017

Fed Holds Rates for Now But...

Unsurprisingly, the Federal Reserve kept rates on hold following the end of its 2-day meeting on Wednesday. They did, however, indicate that one more hike is possible before year-end. The recent drop in inflation appears to not have unsettled the policymakers, with Fed Chair Yellen commenting “What we need to figure out is whether the factors that have lowered inflation are likely to prove persistent” if they do “it would require an alteration of monetary policy”. In justification of the decision for an additional hike later this year the Fed cited low unemployment, growth in business investment and a moderate but durable economic expansion. Fed projections are suggesting 3 rate hikes in 2018, 2 hikes in 2019 and 1 hike in 2020. Also, as expected, the Fed said it would begin to reduce its massive holding of bonds and mortgage-backed securities in October. With an estimated $4.2 Trillion in assets, the reductions will take place gradually and moderately in the coming months and years.

In another unsurprising move on Thursday, the Bank of Japan kept their monetary policy unchanged, keeping interest rates on hold and their asset purchase program unchanged.

EURUSD gave up recent gains to trade as low as 1.18653 overnight. Currently, EURUSD is trading around 1.1895.

USDJPY climbed to 3-month highs reaching 112.643 in early Thursday trading. Currently, USDJPY is trading around 112.40.

GBPUSD is currently trading around 1.35 in relatively quiet early trading.

Gold gave back gains against USD, as the precious metal traded overnight to a 3-week low of $1,295.80.

WTI remains strong against USD, with WTI trading up to $50.82pb in early trading. Currently, WTI is trading around $50.70pb.

Major economic data releases for today:

At 13:30 BST, the US Department of Labor will release Initial Jobless Claims for the week ending September 15th and continuing Jobless Claims for the week ending September 8th. The forecast is for an increase to 300K from the previous 284K. The US Labor market has been robust throughout the year, and whilst a higher reading would generally be bearish for the USD, the impact of the recent storms makes this less impactful.

At 14:30 BST, the ECB President, Mario Draghi, is due to provide welcome remarks at the 2nd ESRB annual conference in Frankfurt, Germany.


Source link  
The precious metal has broken out

The precious metal has broken out from its descending wedge around 1331.00 and moved higher to create a lower high at 1361.80.The price then...

All Focus on US inflation data

The USD has weakened further overnight as the market awaits important US Data at 13:30 GMT. USDJPY broke down under 107.000, while...

Central Bank speakers start a quiet week

UK MPC Member Vlieghe spoke at the Resolution Foundation in London. Some of the comments made were: If there is less credit headwind to the UK economy...


Equities Face a Nervous Session

The global equity markets are bracing themselves for a stormy closing session this week, as data from Thomson Reuters Lipper unit shows US fund...

Super Thursday for the Bank of England

The Bank of England is expected to largely proceed as normal today on ‘Super Thursday’ when the central bank releases its policy decision and statement...

US Nonfarm Payrolls Today

Today is Non-farm Payrolls day in the US. This data release is generally one of the most important of the month, being a leading indicator of consumer...


Australian Dollar drops after soft data

The Australian dollar eased on Thursday following weaker-than-expected economic data. The Australian Dollar took an initial knock on Wednesday on...

Trump Supports a Strong Dollar

Markets have had a volatile session this week thanks to various US officials and yesterday was no exception, with President Trump speaking in Davos...

A Weaker Dollar is Good for the US

Yesterday, Senior US Officials took the lead from their President and made clear the US position on Trade. Commerce Secretary Wilbur Ross...

  


Share: