Saturday March 26, 2016 - 12:08:33 GMT
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Markets Tiring Of Fed Forward Guidance
John M. Bland, MBA, CTA
Keep Your Head On A Swivel
Just last week my article focused on the completely unexpected dovish turn in Fed policy by Chair Yellen after the latest Fed meeting sent the EURUSD sharply higher. The on Monday, two Fed Governors, Lacker and Williams, threw cold water on the soft Fed policy by indicating a rate hike could be imminent. Then, two additional Fed members, Harker and Evans, made additional hawkish sounding comments on Tuesday.
St. Louis Fed President Bullard joined the chorus late Wednesday, raising the risk of an April rate hike. Some argue that Fed officials have been vocal this week because the markets have interpreted Chair Yellen's comments after the FOMC meeting a week ago incorrectly. That could be, but I listened to her every word last Wednesday and I think the markets read her message correctly. Maybe she sent the wrong message? Yellen will get an opportunity to send a clearer message to the markets Tuesday in NYC.
Current Market Conditions
Forex markets have reluctantly been "going with the flow" over the past week, even though its unclear what the policy posture at the Fed must be. Speculation last week that there had been an unannounced G20 agreement to weaken the USD is now being dismissed, although some still feel that there is some coordination of monetary policies by key central banks underway. Increasingly, some are feeling a rate hike might now be in play and this is seeing the USD rising.
Over the weekend, European and U.K. clocks will have been advanced by one hour so that the time differences between markets will return to the normal 5 to 6 hours. Also, some key European markets will be closed for Easter Monday. North America will be open.
WEEKLY HIGH IMPACT NEWS:
00:00 EU/UK Clocks Advance One Hour
ALL DAY AU, NZ, EZ, CH, UK Holiday
14:00 US- PCE Deflator
14:00 CB Confidence
16:20 US- Yellen Speech
12:15 US- ADP Jobs
14:30 US- EIA Crude
08:30 GB- GDP
09:00 EZ- flash HICP
12:30 US- Weekly Jobless
23:50 JP- Tankan
ALL DAY FINAL MFG PMIs
12:30 US- Employment
14:00 US- final Univ of Michigan Survey
00:00 AU/NZ Clocks Fall Back One Hour
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
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