Tag Archive: FOMC

For The Fed, None Of These Details Will Matter

Most people have the impression that these various payroll and employment reports just go into the raw data and count up the number of payrolls and how many Americans are employed. Perhaps the BLS taps the IRS database as fellow feds, or ADP as a private company in the same data business of employment just tallies how many payrolls it processes as the largest provider of back-office labor services.That’s just not how it works, though. In fact,...

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The Red Warning

Now it’s the Russian’s fault. Belligerence surrounding Donbas and Ukraine, raw materials and energy supplies to Europe threatened by Putin’s coiled bear. Why wouldn’t markets grow worried?There’s always a reason why we shouldn’t take these things seriously, or quickly dismiss them out of hand as the temporary product of whichever political fear-of-the-day.

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After Today’s FOMC, Yield Curve Is Already As Flat As It Was In Mar ’18 **Without A Single Rate Hike Yet**

It’s not hard to reason why there continues to be this conflict of interest (rates). On the one hand, impacting the short end of the yield curve, the unemployment rate has taken a tight grip on the FOMC’s limited imagination. The rate hikes are coming and the markets like all mainstream commentary agree that as it stands there’s nothing on the horizon to stop Jay Powell’s hawkishness.

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FX Daily, January 26: Federal Reserve and Bank of Canada Meet as Risk Appetites Stabilize

After a slow and mixed start in Asia, where Australia and India are on holiday, equity markets have turned higher.  Europe's Stoxx 600 is up around 1.9% near midday in Europe, which if sustained would be the biggest gain of the year.  US futures are snapping backing too, with the S&P 500 popping more than  1% and NASDAQ by 2%. 

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The Hawks Circle Here, The Doves Win There

We’ve been here before, near exactly here. On this side of the Pacific Ocean, in the US particularly the situation was said to be just grand. The economy was responding nicely to QE’s 3 and 4 (yes, there were four of them by that point), Federal Reserve Chairman Ben Bernanke had said in the middle of 2013 it was becoming more than enough, creating for him and the FOMC coveted breathing space so as to begin tapering both of those ongoing programs.A...

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Gold Price News: Gold Down 1% in Wake of More Hawkish Federal Reserve Meeting Minutes

Gold price fell to $1,808 an ounce in the wake of the release of the minutes of the December Federal Reserve meeting, having hit an intra-day high of $1,829. Silver price fell to $22.72 an ounce from an intra-day high of $23.26.

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FOMC Sets New Course

The Fed delivered what it was expected to do:  double the pace of tapering and project a more aggressive interest rate response with its individual forecasts.  The dollar initially rallied on the headlines, and new sessions highs were recorded, but the price action was a bit of a head-fake, as it were. The greenback's gains were quickly pared,  though it remained above JPY114 ahead of Chair Powell's press conference. The market had already...

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Has the Market Carried the Fed’s Water? Is the Dollar Vulnerable to Buy the Rumor and Sell the Fact?

Overview: The US dollar is trading with a bit of heavier bias against most of the major currencies as the focus turns to today's FOMC meeting, where a clear consensus has emerged in favor of faster tapering and a dot plot pointing to a steeper pace rate hikes.  Emerging market currencies led by Turkey and South Africa are mostly lower. The JP Morgan Emerging Market Currency Index is lower for the third straight session.  The US 10-year Treasury...

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Dollar Starts the Week Bid ahead of the FOMC

Overview: Equities, bonds, and the dollar begin the new week on a firm note.  Japanese, Chinese, Australian, and New Zealand equities advanced in the Asia Pacific region.  Europe's Stoxx 600 is snapping a three-day decline, and US futures are 0.25%-0.35% higher.  The US 10-year yield is a little softer at 1.48%. European benchmark yields are mostly 1-2 bp lower, and near 0.71%, the UK Gilt's yield is at a three-month low.  The dollar is rising...

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The Greenback Finds Traction ahead of the Jobs Report

Overview:  The Omicron variant has been detected in more countries, but the capital markets are taking it in stride.  Risk appetites appear to be stabilizing.  The MSCI Asia Pacific Index rose for the third consecutive session, though Hong Kong and Taiwan markets did not participate in the advance today.  Europe's Stoxx 600 is struggling to hold on to early gains, while US futures are narrowly mixed.  The US 10-year yield is a little near 1.43%,...

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This Is A Big One (no, it’s not clickbait)

Stop me if you’ve heard this before: dollar up for reasons no one can explain; yield curve flattening dramatically resisting the BOND ROUT!!! everyone has said is inevitable; a very hawkish Fed increasingly certain about inflation risks; then, the eurodollar curve inverts which blasts Jay Powell’s dreamland in favor of the proper interpretation, deflation, of those first two.

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Market Shrugs Off Chinese Signals and Keeps the Yuan Bid

Overview:  The US dollar has come back bid from the weekend against most currencies following the talk by a couple of Fed governors about the possibility of accelerating the tapering at next month's FOMC meeting.  The weekend also saw protests against the social restrictions being imposed by several European countries in the face of a surge in Covid cases.  The Swedish krona, yen, and sterling are the weakest, while the dollar-bloc currencies are...

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Flash PMIs Play Second Fiddle to US PCE Deflator and Accelerating Inflation

The flash November PMIs would be the main focus in the week ahead if it were more normal times.  But these are not normal times, and growth prospects are not the key driver of the investment climate.  This quarters' growth is largely baked into the cake.  The world's three largest economies, the US, China, and Japan, are likely to accelerate for different reasons in Q4 from Q3.  Europe is the weak sibling, and growth in the eurozone and UK may slow...

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What Does Taper Look Like From The Inside? Not At All What You’d Think

Why always round numbers? Monetary policy targets in the post-Volcker era are changed on even terms. Alan Greenspan had his quarter-point fed funds moves. Ben Bernanke faced with crisis would auction $25 billion via TAF. QE’s are done in even numbers, either total purchases or their monthly pace.

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And the Dollar Bounces Back, While BOE is in Focus

Overview:  The Federal Reserve announced tapering and, like the Reserve Bank of Australia earlier in the week, did not validate expectations for an aggressive rate hike.  Now the focus is on the Bank of England, where several officials seemed to goad the market into lifting short-term rates. The S&P 500 and NASDAQ rallied to new record highs yesterday and helped raise global shares today.  Among the large markets in the Asia Pacific region,...

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Week Ahead: The First Look at US and EMU Q3 GDP and more Tapering by the Bank of Canada

The macro highlights for the week ahead fall into three categories.  First are the preliminary estimates for Q3 GDP by the US and the EMU.  Second, are the inflation reports by the same two.  The US sees the September PCE deflator, which the Fed targets, while the eurozone releases the first estimate for October CPI.  Third are the meetings of three G7 central banks, the BOJ, the ECB, and the Bank of Canada. The broad backdrop includes softening...

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What to Expect When You are Expecting

Overview: The markets have stabilized since Monday's panic attack but have not made much headway.  China and Taiwan returned from the extended holiday weekend.  Mainland shares were mixed. Shanghai rose by about 0.4%, while Shenzhen fell by around 0.25%.

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How (Not) to Win Friends and Influence People

Overview:  There are two big themes in the capital markets today.  The first is the ongoing push of the Chinese state into what was the private sector.  Today's actions involve breaking Ant's lending arms into separate entities, with the state taking a stake.  This weighed on Chinese shares and Hong Kong, where many are lists. On the other hand, Japanese markets extended their recent gains.

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The FOMC Accidentally Exposes Itself (Reverse Repo-style)

Initially, the dots got all the attention. Though these things are beyond hopeless, the media needs them to write up its account of a more fruitful monetary policy outcome because markets continue to discount that entirely.

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FX Daily, June 16: Will the Fed Talk the Talk?

With the outcome of the FOMC meeting awaited, the dollar is narrowly mixed in quiet turnover. The Scandis are the weakest (~-0.3%) among the majors, while the Antipodeans are the strongest (~+0.25%). JP Morgan's Emerging Market Currency Index is snapping a three-day decline

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