OctaFX | OctaFX Forex Broker
Open trading account

Fed: Dovish stance, one more time – ANZ

FXStreet (Delhi) – Research Team at ANZ, suggest that the clear message from the FOMC seems to be a holding pattern, waiting for further labour market strength to bolster confidence that inflation will return to trend, and also likely some stability in the global economics and financial market picture.

Key Quotes

“The Fed seems to have become more dovish on inflation, and is considering a wide range of information in its policy deliberations. As such, December is likely to be the earliest realistic window for the Fed to finally move.”

“The 0.375% projection for December suggests that the Fed’s central case is still a hike in one of the two remaining meetings (October and December) this year. Specifically, 13 of 17 members are forecasting a hike this year.”

“There appears to be a slight shift in Fed thinking on inflation. Yellen indicated that with headline inflation low, it may be prepared to let the labour market run that bit firmer in order to raise confidence that it will obtain its inflation objective over the medium term.”

“For foreign exchange markets the Fed’s dovish tilt has some important implications. The USD is likely to weaken somewhat further against G4 currencies, but the strength in peripheral currencies is likely to be temporary.”

“For rates markets curves are likely to steepen, swap rates decline, and high yield and other credit markets do well.”

Dovish delay from the Fed but liftoff still on the table - Nomura

Jens Nordvig, Research Analyst at Nomura, suggests that the Fed delayed liftoff at the September meeting and press conference had some dovish elements but its still on the table for 2015.
Read more Previous

Asia steadies as dust settles after FOMC, a quiet European session ahead

The risk-off sentiment dominated Asia, as markets still remain cautious over the Fed’s decision and the extending uncertainty on the timing of the interest rate hike and the overall US economic prospects. The yen remained better bid while the Antipodeans saw a minor pullback from the post-FOMC lows.
Read more Next
Start livechat