NY Open: Watching paint dry
FX Trader, Loonieviews.net
Summary: Traders are on tenterhooks ahead of the release of the latest FOMC meeting minutes later today. They shouldn't bother. Fed board members have repeatedly flown the dovish flag in recent days, so why expect surprises?
The January 30 statement was dovish. The committee deleted the reference to “further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labour market conditions, and inflation near the Committee's symmetric 2 per cent objective over the medium term” that was in the December 19 statement.
They said they would be patient. A series of Fed speakers since the meeting have reiterated the dovish bias and the need for patience. Yesterday, New York Fed President John Williams told Reuters he didn’t see any need to raise interest rates from the current level. Noted hawk, Cleveland Fed President Loretta Mester concurred and approved of the “wait and see” approach.
Traders, hoping for fresh insight into the committee’s thinking from a twenty-day old meeting will be disappointed.
FX price action has been slow-motion. The G10 major currencies are mostly unchanged from their New York opening levels as traders mark time until the FOMC minutes. GBPUSD is hovering just above it’s overnight low. Prices are torn between hopes that Prime Minister May can extract some deal-saving concessions from European Commission President Jean-Claude Juncker and fears about more conservative MPs jumping ship, further weakening May’s minority government.
Wall Street appears to be focused on the FOMC minutes. Prices opened flat and are only slightly higher as of 14:00 GMT. Traders are also watching for headlines about the China/US trade talks.
Latest Market Insights
Quarterly Outlook Q2 2022: The End Game has arrived
Productivity and innovation have never been more important
The great EUR recovery and the difficulty of trading it
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard place
The Great Erosion
Cybersecurity – the rush to catch up with reality
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)