Fed Week Ahead: Chances Appear High For Another Rate Hike, But Market Seems Strong
Powell and company ride again this coming week. The Fed takes the spotlight Tuesday and Wednesday in a meeting that investors widely expect to result in another rate hike, the third of the year. Fed Chair Jerome Powell has made it clear he believes the Fed should continue gradually raising borrowing costs, and the futures market appears to buy what he’s selling. As of Friday, CME futures placed rate increase odds at around 94%. Since the Fed usually does such a good job readying investors for a hike, the question is more around what might emerge from the post-meeting release and Powell’s Wednesday press conference. Investors are likely to be on the edge of their seats waiting to hear Powell’s views on inflation and wage growth, and what he says could help shape expectations for future rate moves not just in 2018, but increasingly looking into 2019 as well. In one signal of expectations ahead of the meeting, 10-year Treasury yields rose to 3.07% as of midday Friday after a solid rally from levels down near 2.8% a month ago. Read More @ https://www.forbes.com/sites/jjkinahan/2018/09/22/fed-week-ahead-chances-appear-high-for-another-rate-hike-but-market-seems-strong/#715b5ff13e71
ECB on Runway to Rate Liftoff Considers What Should Happen Next
European Central Bank officials are starting to discuss priming investors for the euro area’s first interest-rate increase since 2011, a conversation that could see them putting the U.S. experience of three years ago under the microscope. With the Governing Council indicating borrowing costs will stay at record lows “at least through the summer of 2019,” two of President Mario Draghi’s lieutenants are already talking about what happens after that. Executive Board members Benoit Coeure and Peter Praet want to communicate more on the pace of increases to avoid stirring up markets. Concerns over the impact of tighter policy are likely heightened by the memory of the two increases in 2011 being swiftly undone as the euro zone tipped into recession. Officials insist the economy is now strong enough to face global risks from trade protectionism to Brexit, but also regularly cite market volatility as a risk. That makes a so-called dovish hike an attractive goal. Read More @ https://www.bloombergquint.com/global-economics/2018/09/23/ecb-on-runway-to-rate-liftoff-considers-what-should-happen-next#gs.cf0jHas
Financial markets must wake up to the damage and havoc wreaked by this US-China trade war
The phoney (trade) war has been going on for many months since Donald Trump first threatened and then began to unleash tariffs against China and others; so much so that financial markets – the US stock market in particular – have begun to believe that the scare is indeed “phoney.” It is not, and that truth is about to dawn. Read More @ https://www.scmp.com/business/money/article/2165395/financial-markets-must-wake-damage-and-havoc-wreaked-us-china-trade
China takes trade war to US heartland, using an Iowa newspaper
China reached into the US heartland in its escalating trade war over US President Donald Trump’s tariffs, using an advertising supplement in Iowa’s largest newspaper to highlight the impact on the state’s soybean farmers as “the fruit of a president’s folly”. The four-page section in Sunday’s Des Moines Register, which carried the label “paid for and prepared solely by China Daily, an official publication of the People’s Republic of China”, featured such articles as one outlining how the trade dispute is forcing Chinese importers to turn to South America instead of the US for soybeans. Read More @ https://www.stuff.co.nz/business/world/107320293/china-takes-trade-war-to-us-heartland-using-an-iowa-newspaper
WHAT IS THE USD SAYING?
USD is back to re-test line and the next move will be range till FOMC is done; the USD is giving a strong signal of resilient. Will the USD break the resistance or will the USD head towards $93 or lower – this Thursday morning all the questions will be answered. Be cautious and always have good money management in place.
TODAYS NEWS THAT MIGHT AFFECT YOUR TECHNICAL TRADES.
- 1.35pm – Bank of Japan Gov. Kuroda will speak – JPY volatility expected – can go either direction.
- 2.00pm – German WPI data will be released; It’s a leading indicator of consumer inflation – when wholesalers charge more for goods and services the higher costs are usually passed on to the consumer. We maintain BUY for EURO.
- 4.40pm – GBP will go to action when MPC Member Vlieghe Speaks.
- 9.00pm – US will release consumer confidence and Richmond Manufacturing data – both are expected to be weak. We hold USD position till FOMC.
The market continues to stay sideways and awaits FOMC Minutes this Thursday morning. Be cautious and always put money management as your priority.
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