Saturday September 12, 2015 - 10:58:50 GMT
Share This Story
Global-View - www.global-view.com
Crunch Time For The Fed
John M. Bland
Fed About To "Normalize" Policy?
This could be a momentous week for the financial markets with the Federal Reserve possibly poised to tighten monetary policy for the first time since the financial crisis in 2008. In the opinion of a majority of observers, recent economic data have met the tests for sustainability. The only open question is whether there has been sufficient market stability in the opinion of the central bank governors to pull the trigger. The 0.25% rate hike envisioned by the central bank would only be a token adjustment and any impact on the economy would only be psychological. The Fed wants to start to "normalize" interest rates now, and barring an unexpected financial catastrophe between now and Thursday, I think they will hike interest rates at this meeting. They will not see any advantage to a postponement of this decision. Street opinions appear to me to break 50-50 on whether they tighten or not. Thursday will be an interesting day.
Forex Market Developments
The most recent week has seen a bout of short-covering of EURUSD positions with the key EURUSD 200-day moving average at around the 2.1250 level breached. Above the 200-day average, all the former downside momentum in EURUSD is neutralized. This is yet another reason why the Fed might seriously consider a rate hike at their Wednesday-Thursday meeting, since their fundamental bias is to raise rates. Broadly the EURUSD remains in a rough 1.0500 to 1.1700 trading range. 1.1100 is the midpoint of that band. Traders don't know what to do with the USDJPY. Its 200-day average is 120.80 and its focus of trade is the 120.00 level. The GBPUSD 200-day average is 1.5350. Trade in this pair is focused on the 1.5500 line. Thus in the three major pairs, the USD bias has turned mildly negative.
The upcoming week is an important period for major economic data.
-- Monday, September 14, No Major Data.
-- Tuesday September 15, BOJ, GB- CPI, DE- ZEW Survey, US- Retail Sales. Industrial Production
-- Wednesday September 16, GB- Employment, EZ- Final CPI, US- CPI, Crude
-- Thursday September 17, JA- GDP, CH- SNB Decision, GB- Retail Sales, Weekly Jobless, Current Account, Housing Starts/Permits, Fed Decision
-- Friday September 19, CA- CPI, US- Leading Indicators
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
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."