USD: Delayed lift-off expectations stamped by FOMC minutes

9 October, 2015

Lee Hardman, Currency Analyst at MUFG, suggest that the release of the latest FOMC minutes from their meeting in September has provided some reassurance to the market that the pace of tightening will be more gradual although offered little fresh policy insight.

Key Quotes

“Commodity related and emerging market currencies have continued to rebound in the Asian trading session supported by the ongoing improvement in investor risk sentiment. The ongoing improvement in global investor risk sentiment continues to be mainly driven by dampened expectations for Fed monetary tightening rather than any material brightening in the outlook for global growth.”

“The minutes revealed that the committee decided it was prudent to wait for additional information confirming the economic outlook had not deteriorated before tightening monetary policy. The subsequent release of the disappointing non-farm payrolls report for September has since heightened concerns that the US economy is slowing.”

“There was no clear signal in the minutes that the Fed was close to raising rates in September as suggested since by some FOMC members.”

“After the disappointing payrolls report the likelihood of the first rate hike being delivered this year has diminished although it can’t yet be fully ruled out. US financial conditions are now easing materially as the US dollar softens and US equities rebound which will help to ease concerns over the outlook for the US economy which if continued in the coming months could make the Fed more willing to begin raising rates than in September.” 


Source link  
Oil rebounds, set for third straight weekly rise

Oil benchmarks on both sides of Atlantic resumed its upward trajectory on Friday, reversing a temporary slide seen the day earlier and remain poised to book third straight week of gains...

Oil prices wobble as output freeze is viewed with skepticism

Oil prices recovered losses seen in early Europe, but gains are hard to come as markets believe next Sunday’s output freeze meeting in Doha is unlikely to help address supply glut issue...

Gold struggles to take out 5-DMA hurdle

Having ended on a weaker note on Friday despite broad based USD selling, Gold is having a tough time breaching 5-DMA hurdle at $1259.36 levels...


Buy the dips in USD towards 96.50/96.00

With that shift in the Fed’s tenor the USD should begin to benefit from a likely continued trend of more positive data surprises, our US data surprise index still some distance from hitting levels that warn a reversal is imminent...

European stocks rise in early trading

European equities advanced in early trading even though investors in Asia shied away from risk due to losses in commodities and Chinese equity markets...

Gold jumps above 1% on China rate cut

Currently, gold trades 1.18% higher at 1234.80, retreating slightly from fresh session highs printed at 1236.10 some minutes ago. The precious metal jumped nearly $ 4 after the Chinese central bank slashed the RRR by 0.5% in a bid to stimulate economic growth, which would in turn lift the demand for the bullion...


Brexit: Major blow to Cameron bid to remain in EU

While sterling may garner a little solace from any pre-EU remarks from Carney today, in view of the real risk that the UK could vote to leave the EU in June, we have pushed up our 1 mth EUR/GBP forecasts to 0.79...

USD positioning remains constructive

Leveraged funds reduced their net long USD positions by USD1.5bn to USD22.6bn in the week ended 2 February, reversing the gain in the previous week...

GBP could gain from BOE message

Research Team at BNP Paribas, notes that the UK data has outperformed this week, with both manufacturing and non-manufacturing PMIs improving in contrast to weakening elsewhere...

  


Share: