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- Expectations of tapering will rise as labour market continues to show cumulative improvement
- Fed wants to be assured that any progress in labour market will be lasting
- Unemployment and and payrolls have clearly improved but other labour data has not
- FOMC decisions are dependant on data
- Forward guidance and asset buying separate tools but market sees them closely linked creating challenges for Fed
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Fed Bullard: Small taper would still leave very stimulative policy
Dollar up to 98.50 as sterling and euro lose
Dollar yen got a bit nervy in the seconds leading up to the release, falling to 98.06 but then found it’s stride and has pooped up to 98.50, The euro popped to 1.3785 then dropped to 1.3728. Cable has fallen to 1.6025 but has held ahead of support at 1.6020.
Having done a quick text comparison from last months meeting there’s nothing of note between the texts so it’s business as usual. Nothing on the shutdown or Washington shenanigans and I think they may use this card at a later stage like next…
Having done a quick text comparison from last months meeting there’s nothing of note between the texts so it’s business as usual. Nothing on the shutdown or Washington shenanigans and I think they may use this card at a later stage like next…
Fed says it will await more evidence before QE taper
Highlights of the October 30, 2013 Federal Reserve’s FOMC statement:
- Fed funds rate held at 0-0.25%, as expected
- Monthly bond purchases remain at $85 billion/month, as expected
- No change to forward guidance on interest rates
- Fed says data since Sept meeting generally suggests economy continued to expand at a moderate pace
- Repeats that downside risks to the outlook have diminished on net since last Fall
How to trade a surprise Fed decision
Can the market really be this complacent heading into a Fed decision?
On September 18, the Fed burned many market watchers with a surprise decision not to taper. Six weeks later many traders plan to sleep through today’s FOMC decision, believing it will be similar to the previous statement. What is the risk of a surprise? In September, the Fed explained the decision not to taper like this:
Taking into account the extent of federal fiscal retrenchment, the Committee sees the improvement in eco…
On September 18, the Fed burned many market watchers with a surprise decision not to taper. Six weeks later many traders plan to sleep through today’s FOMC decision, believing it will be similar to the previous statement. What is the risk of a surprise? In September, the Fed explained the decision not to taper like this:
Taking into account the extent of federal fiscal retrenchment, the Committee sees the improvement in eco…
What to do with the FOMC announcement
We have the usual hyped-up stand-off ahead of the actual announcement. Stop me if you’ve heard this before but I will be waiting to see what actually happens rather than get involved in a crap shoot prior ( and I choose my sporting reference carefully!)
The minutes from the last meeting showed the decision not to taper was a close call but the relevance of this stance has since been reduced/dismissed given the partial US govt shut-down and the less than accurate data releases since then.
So to t…
The minutes from the last meeting showed the decision not to taper was a close call but the relevance of this stance has since been reduced/dismissed given the partial US govt shut-down and the less than accurate data releases since then.
So to t…
Forex Americas wrap: Nowotny cracks the whipsaw
Forex headlines for October 29, 2013:
• US retail sales Sept -0.1% vs 0.1% expected
• Retail sales control group +0.5% vs 0.4%
• ECB’s Nowotny: No realistic prospect of refi or deposit rate cut
• US October consumer confidence 71.2 vs 75.0 expected
• US Case-Shiller house price index +12.82% y/y vs 12.5%
• US Aug business inventories +0.3% vs +0.3%
• Carney says BOE won’t tighten until ‘real trajectory’ in recovery
• …
• US retail sales Sept -0.1% vs 0.1% expected
• Retail sales control group +0.5% vs 0.4%
• ECB’s Nowotny: No realistic prospect of refi or deposit rate cut
• US October consumer confidence 71.2 vs 75.0 expected
• US Case-Shiller house price index +12.82% y/y vs 12.5%
• US Aug business inventories +0.3% vs +0.3%
• Carney says BOE won’t tighten until ‘real trajectory’ in recovery
• …
Will Doctor Yellen prescribe a dose of inflation for the
The noises being made about a possible increases to QE are rising. A New YorkTimes story over the weekend adds further evidence that some are calling for more.
They note that the topic of discussion at the Fed may start to focus on inflation and whether more QE should be done to boost inflation up, to give the economy the boost it’s lacking.Harvard professor Kenneth Rogoff says that inflation needs to be embraced and that the Fed is being too meek. He wants inflation pushed up to 6% for a few ye…
They note that the topic of discussion at the Fed may start to focus on inflation and whether more QE should be done to boost inflation up, to give the economy the boost it’s lacking.Harvard professor Kenneth Rogoff says that inflation needs to be embraced and that the Fed is being too meek. He wants inflation pushed up to 6% for a few ye…
S&P Yellen nomination a near to intermediate positive
Standard & Poor’s give two reasons that Janet Yellen’s nomination as Chairman of the Federal Reserve is a near-to-intermediate term positive:
- Yellen’s nomination provides markets with a sense of continuity of the Fed’s current monetary policy decision-making and communications process
A debt ceiling solution is coming, here is when
Get used to more weeks like this, the fight over US debt will be a long, bitter struggle. As I write this article, it looks like there may be a short term deal to raise the debt ceiling this weekend avoiding financial catastrophe for the time being. A bigger deal is supposedly being negotiated however this row has been on-going for more than two years and so I am skeptical of any grand bargain.
The longer and more bitter the dispute becomes the more difficult it is for either side to eventuall…
The longer and more bitter the dispute becomes the more difficult it is for either side to eventuall…
What is the probability of a US default?
As went enter day 10 of the US political soap opera, the market is still seemingly under the impression that a deal will get done and financial armageddon will be averted. I’m not sure I share it’s views and I feel the dollar is playing chicken with the deadline much like the two parties are with each other.
I want to hear what you guys and girls think, so what’s your percentage probability of the US defaulting?
Mine is 10/90 on a default/solution.
Let’s see if you share the markets optimism.…
I want to hear what you guys and girls think, so what’s your percentage probability of the US defaulting?
Mine is 10/90 on a default/solution.
Let’s see if you share the markets optimism.…