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Market ready for Fed's QE3 end - Adam Narczewski

FXStreet (Łódź) - Adam Narczewski, Financial Analyst at X-Trade Brokers, XTB projects that the Fed will end its asset purchase program at today's meeting, while market attention will shift to the timing of the first interest rate hike.

Key quotes

"On the upcoming meeting, the Fed will cut the last 15 bln USD of QE and the market is 100% ready for it."

"The speculations are about when the first interest rate hike will happen. This is a very important discussion since depending on the timing of these hikes, bond yields and the USD will move."

"From the published chart (once every 3 months) we see that many FOMC members in September expected 3-4 interest rate hikes next year."

"Despite the fact the Eurozone economy is doing much worse and there is nervousness on the market, these predictions should not change as data from the US economy is pretty good: the labor market is getting stronger, industrial production is increasing and inflation is stable (just slightly below the Fed's target)."

"On the other hand market rates have been declining as investors expect that the tightening of monetary policy will take longer than it was thought 2-3 months ago."

"Still, on the upcoming Fed meeting we will get the raw statement. Additional data and Yellen's press conference will take place in December."

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