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  
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...

So, Who Will Be the Next Fed Chair?

The markets are turning their attention to who will become the next Chairperson of the Federal Reserve. President Trump recently commented that...

Bank of England Faces Conundrum

On Wednesday, data released by the UK Office for National Statistics (ONS) showed average weekly earnings (excluding bonuses) rose...


UK Inflation at 5-Year High

The likelihood of a rise in UK interest rates, for the first time in a decade, gained momentum on Tuesday as UK CPI edged up from 2.9% to 3.0%...

US Inflation Disappoints

US Consumer Price Index data was released and failed to impress the markets. With US gasoline prices spiking, following the disruption caused by the recent Hurricanes...

Can CPI Follow PPI Lead?

In early Friday trading, the markets are relatively static as they wait, in anticipation, for today’s US inflation data that will potentially give confirmation...

  


Share: