NEWS AND ANALYSIS

Incisive market commentary from David Morrison

Stay ahead with our market commentary and webinars from our in house market strategist

Open a Live AccountOpen a Demo Account
 
+ Show blog menu

Categories

Menu

Expand 2017 <span class='blogcount'>(342)</span>2017 (342)
Collapse 2016 <span class='blogcount'>(483)</span>2016 (483)
Expand December <span class='blogcount'>(23)</span>December (23)
Expand November <span class='blogcount'>(41)</span>November (41)
Expand October <span class='blogcount'>(37)</span>October (37)
Expand September <span class='blogcount'>(41)</span>September (41)
Expand August <span class='blogcount'>(52)</span>August (52)
Expand July <span class='blogcount'>(38)</span>July (38)
Expand June <span class='blogcount'>(42)</span>June (42)
Collapse May <span class='blogcount'>(42)</span>May (42)
PM Bulletin: BOJ and the yen
31 May 2016
AM Bulletin: Quiet start following holiday weekend
31 May 2016
PM Bulletin: Meanwhile in China
27 May 2016
AM Bulletin: Yellen in focus ahead of holiday weekend
27 May 2016
PM Bulletin: FTSE breaks above 6,200 again
26 May 2016
Holiday Schedule: Memorial Day 30th May 2016
26 May 2016
AM Bulletin: Brent crude tops $50
26 May 2016
PM Bulletin : Crude Chart
25 May 2016
AM Bulletin: “Risk-on” trade continues
25 May 2016
PM Bulletin: Another poll boost for sterling
24 May 2016
AM Bulletin: Equities slip as rate hike worries persist
24 May 2016
PM Bulletin: Changing expectations
23 May 2016
Weekly Bulletin: I’ll see your hike and raise you two
23 May 2016
PM Bulletin : Significant events ahead of June FOMC
20 May 2016
AM Bulletin: Preparing for a summer rate hike
20 May 2016
PM Bulletin : Gold struggles as dollar strengthens
19 May 2016
AM Bulletin: FOMC more hawkish than anticipated
19 May 2016
PM Bulletin : FOMC minutes and the S&P
18 May 2016
AM Bulletin: FOMC minutes in focus
18 May 2016
PM Bulletin: Cable rallies on latest poll
17 May 2016
AM Bulletin: US equities lead bounce-back
17 May 2016
Weekly Bulletin : Waiting on Central Banks
13 May 2016
PM Bulletin : Apple
13 May 2016
Holiday Schedule Whit Monday Market Holiday
13 May 2016
AM Bulletin : US Retail Sales in focus
13 May 2016
PM Bulletin : Silver and Gold
12 May 2016
AM Bulletin: Investors wary after Wall Street sell-off
12 May 2016
PM Bulletin: Two headaches for Elon Musk
11 May 2016
AM Bulletin: Stock indices pull back after rally
11 May 2016
PM Bulletin: Yen pulls back on jawboning
10 May 2016
AM Bulletin: Markets steady on commodity bounce
10 May 2016
PM Bulletin: Precious metals give back recent gains
09 May 2016
Weekly Bulletin: Poor Non-Farm Payroll causes concern
09 May 2016
May: Non Farm Payrolls Out Today
06 May 2016
PM Bulletin: A dismal Non-Farm Payroll number
06 May 2016
AM Bulletin: Non-Farm Payrolls in focus
06 May 2016
PM Bulletin: Non-Farm Payroll look-ahead
05 May 2016
AM Bulletin: Crude bounce lifts equities
05 May 2016
PM Bulletin: Apple update
04 May 2016
AM Bulletin: Equities under pressure
04 May 2016
PM Bulletin: Aussie dollar slumps
03 May 2016
AM Bulletin: RBA cuts by 25 basis points
03 May 2016
Expand April <span class='blogcount'>(45)</span>April (45)
Expand March <span class='blogcount'>(41)</span>March (41)
Expand February <span class='blogcount'>(42)</span>February (42)
Expand January <span class='blogcount'>(39)</span>January (39)
 
 
 

 

Back in December when the US central bank raised rates for the first time since June 2006, the FOMC also released a set of economic projections. These included a prediction from the majority of the seventeen members of the Fed that interest rates would increase by an additional 100 basis points during the course of 2016. This prediction (along with the 25 basis point hike) contributed to a New Year equity market melt-down. Then, as fresh data came through and fears over the outlook for the global economy grew, the Fed was widely ridiculed for its hawkishness. The FOMC toned down its predictions when it released its latest Summary of Economic Projections in March. But ahead of these the market had already decided that the pace of US monetary tightening was likely to be much slower than anticipated by the Fed. Certainly, the likelihood of a rate hike in June (or July for that matter) was viewed as practically zero.  
 
But over the past few weeks we have seen a succession of Federal Reserve members sound off concerning the market’s expectations for rate hikes for the rest of the year. The Fed is obviously desperate to keep the June meeting “live” in terms of tightening monetary policy.
 
Then on Wednesday we saw the minutes of the April FOMC meeting which were considered more hawkish than expected. Perhaps the key takeaway from the minutes is in this passage where it was noted that it “would be appropriate for the Committee to increase the target range for the federal funds rate in June” should incoming data be consistent with a pick-up in economic growth, including continued improvement in the US labour market and inflation “making progress” to the Committee’s 2% inflation target.
 
What this means is that every single data release and economic event between now and the FOMC meeting which takes place over 14th-15th June has the ability to move markets dramatically.
 
Here are the most significant ones:

21st May G7
23rd May FOMC Member Bullard speaks
26th May US Durable Goods
Weekly Jobless Claims
27th May US Preliminary GDP(first revision)
30th May FOMC Member Bullard Speaks 
31st May Core PCE Price Index
Chicago PMI
US Consumer Confidence
1st June  Manufacturing data- US,China,UK.
US ADP Non-Farm Employment
2nd June OPEC meetings
ECB rate decision and press conference
US Challenger Job Cuts
US Weekly Jobless Claims
3rd June US Non-Farm Payrolls
ISM Non-Manufacturing PMI
FOMC member Evans speaks
6th June US Federal Reserve Chair Yellen speaks
9th June Chinese Trade Balance
US Weekly Jobless Claims
12th June Chinese Industrial production/Fixed asset Investment/Retail Sales
14th June US Retail Salesy
15th June Bank of Japan meeting and press conference
US PPI/Empire State Manufacturing/Capacity Utilisation/Industrial production
FOMC statement and rate decision 

  
The Fed is obviously desperate to keep the June meeting “live” in terms of tightening monetary policy.
 
 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

Category: PM Bulletin


Add a comment Add comment            

 

 
© 2017 Spread Co Limited. All Rights Reserved.

Spread Co Limited is a limited liability company registered in England and Wales with its registered office at 22 Bruton Street, London W1J 6QE. Company No. 05614477. Spread Co Limited is authorised and regulated by the Financial Conduct Authority. Register No. 446677.

Spread betting and CFD trading are leveraged products and can result in losses that exceed your deposits. Ensure you understand the risks.

Losses can exceed deposits. Click here to learn more.