The Fed waiting game

13 December, 2016

Ranges were on the tight side during Monday as markets hold back ahead of the two-day Fed meeting in the US which starts today. This is the last major known risk event of the year, so once over, we’re likely to see volatility and volumes diminish into year end. As mentioned yesterday, it’s all about the projections (also known as ‘dot-plot’) of individual FOMC member forecast that are released at the same time. There is also the press conference by Fed Chair Yellen to be considered. Overall, the dollar has done its work ahead of the meeting and remains in a consolidative mood. We also saw US equities pull back a little yesterday, with a similar cautious tone having been seen in Asia.

Data in China had only limited impact, with retail sales rising 10.8% in November, after a 10% rise seen the previous month. Industrial production was a touch firmer than expected at 6.1%, with stocks in China barely changed. However, the relationship between Chinese stocks and the economy has always been weak at best. Sterling will be having a close eye inflation at 09:30 GMT, with headline inflation seen rising to 1.1%, from 0.9% previously. The PPI data, released at the same time, will show input prices rising further on the back of the fall in sterling. Overall inflation is seen moving higher fairly promptly during 2017. In theory, this should be a negative backdrop for a currency, especially given rates will remain low. But many are seeing sterling under-valued on a longer-term basis, which continues to provide support at the margins.


Source link  
More Brexit votes, pound volatility?

At the start of trading on Monday, the British pound fell 0.6%, as a crucial Saturday vote on the new Brexit plan was postponed. Prime Minister...

New Chinese stimulus promises

China continues to struggle for economic growth, as it aims to resist the effect of trade disputes with the U.S. The editor of an influential...

Best currency rally heading for a crash

The analyst who most accurately predicted the ruble's rally in the second quarter is now its most pessimistic forecaster. The Bank of Russia's switch to...


Trade truce 2.0, or new currency wars?

Tensions around trade wars subsided following news reports that both the US and China leaders are set to hold an extended meeting...

Experts predict where crude could go

A top military aide to Iran's supreme leader warned over the weekend that The first bullet fired in the Persian Gulf will push oil prices above...

Morgan Stanley sees global recession

Investors are overlooking the threat posed by the U.S.-China trade war, which could send the global economy into recession in less than a year...


Oil at $100: how will it affect economy?

Brent crude has risen about 33 percent this year and is close to the highest in six months. While higher prices due to strong demand typically reflects...

Oil sector will lose 95% by 2050

Companies in the oil and gas sector, including large groups such as Shell, BP and Exxon, could lose 95% of their value by 2050 if governments...

The US economy recession by 2021

In a recent survey, most business economists believe the U.S. will fall into recession by 2021. Days after the market euphoria over a ceasefire in the...

  


Share it on:   or