Sceptical equities

September 20, 2016

There was a definite yield differentiator on yesterday’s moves against the US dollar, which was generally in retreat. Those gaining the most were those with the highest interest rates, such as the South African Rand, the Aussie and also the kiwi. The Swiss franc and euro were less eager to join the party. This underlines the view that the market was getting more confident on the likelihood of the Fed keeping interest rates on hold at this week’s meeting. The other point of note was the modest gains seen on the yen. Policy options are far less clear cut for them, with the BoJ also due to publish a review of the impact of recent policy measures at this meeting.

For today, there does not appear to be anything major on the horizon that will upset the overall tone. The Fed’s two-day meeting starts, with results announced tomorrow 18:00 GMT tomorrow. It seems that everyone has talked to within an inch of its death the possible outcome of this meeting, just as was the case September of last year. It’s not just about FX though. We had seen the S&P 500’s correlation with Fed expectation increase June to August as the probability of a September hike receded, but that relationship has broken down in the past 3 weeks, equities more worried about the fact that the economy is showing signs of lagging, rather than benefitting from the low rate environment. Before then, we have the BoJ meeting overnight, with results announced before the start of the European session tomorrow. There is a whole plethora of expectations around what they could or could not do, so the potential for volatility remains fairly strong.

Publication source
FxPro information  FxPro reviews

October 24, 2016
Important economic events for the coming week
Monday, October 24, 2016 - JPY Small Business Confidence (OCT), EUR Markit/BME Germany Manufacturing PMI (OCT P), USD Markit US Manufacturing PMI (OCT P)...
October 21, 2016
US Presidential Election: Final Debate Aftermath
With the dust having settled after Wednesday final US presidential debate of the 2016 campaign between Donald Trump and Hillary Clinton, the results have become rather apparent...
October 20, 2016
Doting on Draghi
The ECB meeting arrives today when EURUSD is testing key levels. The mid-year lows at 1.0952 is perilously close as I write, whilst the post-Brexit referendum low of 1.0913 being in the frame after that. It’s hard to see the ECB adding to its quantitative easing policy...

FBS Rating
HYCM Rating
Tickmill Rating
Larson&Holz IT Ltd Rating
FXCM Rating
HotForex Rating

Empire Option Rating
OptionBit Rating
24option Rating
TopOption Rating
Grand Option Rating
EZTrader Rating