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Weekly Bulletin: Equity rally continues
29 Feb 2016
PM Bulletin: Chart for the EURUSD
29 Feb 2016
AM Bulletin: Auction postponement linked to risk rally
26 Feb 2016
PM Bulletin: FOMC members add to confusion over monetary policy
26 Feb 2016
AM Bulletin: US stock indices rebound
25 Feb 2016
PM Bulletin: Lloyds Banking Group
25 Feb 2016
AM Bulletin: Stocks slip on lower crude
24 Feb 2016
PM Bulletin: Gold
24 Feb 2016
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23 Feb 2016
AM Bulletin: Equities slip after strong start to week
23 Feb 2016
Sterling dumps on Brexit fears
22 Feb 2016
AM Bulletin: Stronger start for global equities
22 Feb 2016
AM Bulletin: Netflix leads Nasdaq lower
19 Feb 2016
PM Bulletin: FTSE revisited
18 Feb 2016
AM Bulletin: Oil still leading equities
18 Feb 2016
PM Bulletin: The yen, Nikkei and negative interest rates
17 Feb 2016
AM Bulletin: Oil and FOMC minutes in focus
17 Feb 2016
PM Bulletin: WTI and Brent
16 Feb 2016
AM Bulletin: Equities, USD, oil rally while precious metals slide
16 Feb 2016
Weekly Bulletin: Yellen keeps us guessing
15 Feb 2016
PM Bulletin: A multi-year look at the FTSE100
15 Feb 2016
PM Bulletin: Andrews’ Pitchfork on S&P500
12 Feb 2016
AM Bulletin: Equities remain vulnerable to further selling
12 Feb 2016
PM Bulletin: EURUSD – what now?
11 Feb 2016
AM Bulletin: Yellen fails to calm nerves
11 Feb 2016
PM Bulletin: Yellen steers through Clashing Rocks
10 Feb 2016
AM Bulletin: Yellen testimony in focus
10 Feb 2016
PM Bulletin: Japanese sell-off spooks investors
09 Feb 2016
AM Bulletin: Investors nervous as crude flirts with $30
09 Feb 2016
PM Bulletin: Big “risk-off” moves to start the week
08 Feb 2016
Weekly Bulletin: Investor jitters raises volatility
08 Feb 2016
February: Non Farm Payrolls Out Today
05 Feb 2016
PM Bulletin: Big miss for Non-Farm Payrolls
05 Feb 2016
AM Bulletin: Non-Farm Friday
05 Feb 2016
PM Bulletin: Non-Farm Payroll look-ahead
04 Feb 2016
AM Bulletin: Dollar slumps; oil spikes
04 Feb 2016
PM Bulletin: Tomorrow’s MPC press conference in focus
03 Feb 2016
AM Bulletin: Weaker crude weighs on equities
03 Feb 2016
PM Bulletin: A look at the EURUSD
02 Feb 2016
AM Bulletin: Google can’t lift indices
02 Feb 2016
PM Bulletin: Charts for USDJPY
01 Feb 2016
Weekly Bulletin: Central banks respond to sell-off
01 Feb 2016
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We haven’t quite finished with February yet, but already the countdown to the next US Federal Reserve FOMC meeting is well underway. The FOMC is scheduled to begin its two-day meeting on Tuesday 15th March and will announce its rate decision on Wednesday 16th. This is an extremely important event as it is still possible that the FOMC could decide to raise rates by a further 25 basis points.

This may seem a ridiculous notion given the market ructions since the beginning of the year. Equities fell sharply and there were fresh concerns that the world was about to face a new banking crisis. However, global stocks have since rebounded and banks have been amongst the major beneficiaries of the recovery. Nevertheless, in a report prepared ahead of today's gathering of G20 finance ministers and central bank chiefs, the IMF has warned that policymakers should: “…plan now for coordinated demand support using available fiscal space to boost public investment." The IMF is concerned that general market turbulence, the pace of China's slowdown and falling commodity and asset prices are all major headwinds that could derail a global recovery.

The FOMC’s December summary of economic projections included its “dot plot” which showed that the majority of the committee’s 17 members expected to raise rates by a full 1% over 2016 – or 25 basis points per quarter. Yet the Fed Funds futures market is currently predicting that there won’t be an additional rate hike until the second half of 2017.

Meanwhile a number of FOMC members delivered speeches this week. Stanley Fischer (Fed Vice Chair) and Esther George have indicated that they favour a rate hike at next month’s meeting. Countering this, Dallas Federal Reserve Bank President Robert Kaplan said that "In order to reach our inflation objective we may need to be more patient than we previously might have thought." Then James Bullard, President of the Federal Reserve Bank of St. Louis said: "I regard it as unwise to continue a normalization strategy in an environment of declining market-based inflation expectations." Mr Bullard is generally regarded as one of the Fed’s more hawkish members and he has pushed for higher rates in the past.

None of this helps investors position themselves ahead of the Fed’s meeting. But if we’re feeling confused, it’s more concerning that the Fed appears clueless.

Disclaimer:

Spread Co is an execution only service provider. The material on this page is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by Spread Co Ltd or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

 

Posted by David Morrison

Tagged: Bulletin PM

Category: PM Bulletin


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