Saturday September 5, 2015 - 11:18:54 GMT
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One Precondition For Fed Rate Hike Met
John M. Bland
Fed Wants To "Normalize" At the end of the week before last, Fed-Vice Chair Stanley Fischer laid out current Fed policy wih remarkable clarity. The central bank wants to "normalize" monetary policy as soon as possible. However, Fischer set two preconditions that had to be met before the central bank would pull the trigger on a rate hike. First economic data would have to continue on an improving path and secondly, the financial markets would have to continue to stabilize.
Forex Market Developments Friday saw a mixed August employment report with the headline increase in monthly jobs growth of +173K on the low side of estimates, but the upward revisions to the prior two months of data saw significant increased. As a result, the unemployment rate fell to 5.10% from 5.30%. The Fed now apparently has met the economic precondition for a September rate hike. The second pre-condition, for markets to stabilize, remains to be seen. It is fair to assume that an improving U.S. economy would be USD positive.
Weekly Calendar The upcoming week is a relatively quiet period for major economic data. -- Monday, September 7, US/CA- Holiday, DE- Industrial Output. -- Tuesday September 8, CN- Trade, DE- Trade. -- Wednesday September 9, GB- Output, CA- BOC Decision, US- JOLTS, NZ- RBNZ Decision -- Thursday September 10, AU- Employment, CN- CPI, GB- Bank of England, US- Weekly Jobless. -- Friday September 11, DE- CPI, US- PPI, University of Michigan Survey. Be sure to refer daily Global-View to see the continuously UPDATED Economic Calendar and the Forex Forum for the complete list of key items (actual data, selected charts, etc.) as they are released.
John M. Bland co-founder www.global-view.com
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