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  
Bank of Japan interest rate decision

The Bank of Japan Interest Rate Decision was as expected and left unchanged at -0.1%. The Japanese 10-Year JGB yield target is around zero percent...

Oil Gains and GBP Stumbles

On Tuesday, the American Petroleum Institute said crude stocks in the United States fell by 7.4 million barrels last week. That is almost twice...

Geo-Politics will be the focus of the week

This week will be dominated by Geo-Politics as the US Tax Bill needs to be reconciled between the Senate and House, whilst UK Prime Minister...


Positive Economic Data for Euro and UK

Data released on Thursday from Markit Economics showed eurozone’s thriving economy powered ahead in November, with new manufacturing orders...

UK Growth Forecast Lowered

UK Chancellor Phillip Hammond delivered an Autumn Budget that appeared to be somewhat neutral in its content. More sobering was the updated forecast...

Eurozone economy is robust but...

Speaking at the Frankfurt European Banking Congress, ECB President Mario Draghi, commented that although the eurozone economy was robust...


Trump: Jobs, jobs, jobs!

Data released on Friday showed US job growth accelerated in October after hurricane-related disruptions in the prior month, but a sharp retreat in average earnings and an increase...

UK Interest Rates in Focus

The Bank of England is widely expected to raise UK interest rates for the first time in 10 years today. An expected 0.25% rise, to 0.5%, will push...

Strong US Q3 GDP Boosts USD

The US Commerce Department released Q3 GDP data on Friday, showing the US economy expanded at an annual pace of 3%. With the back-to-back...

  


Share: