Friday February 2, 2018 - 15:32:48 GMT
Share This Story
Global-View - www.global-view.com
Central Banks (Fed and ECB) Continue To Roil The Markets
John M. Bland, MBA, co-founder, Global-View.com
Fed Holds Rates Steady For Now To the surprise of no one, the Fed held rates steady with a Fed Funds target range of 1.25% to 1.50% on Wednesday January 31. Market odds were near zero for a rate hike beforehand. As for the next meeting on March 21, the odds strongly favor (92%) a 25bp hike in the Fed Funds target range. Wednesday was the final meeting with Janet Yellen as Fed Chair. She will be replaced by Jerome Powell shortly. The policy statement has a strong tightening bias going into Powell’s first meeting as Fed Chair. Furthermore, He is scheduled for a press conference at the March 21 meeting.
The January statement was a touch more hawkish than the last and implied that multiple rate hikes are in store for this year. Markets are divided on whether the Fed will hike three or four times in 2018. U.S. Treasury yields have been cranking steadily higher over the past couple of weeks. The 2.70% level has turned from a ceiling on the 10-yr yield to a floor. Following strong U.S. data on Friday (employment and Factory Orders), bond yields climbed to the mid-2.80-2.90% zone, the USD rose and Equities eased.
Policy Change Afoot At The ECB? It seems we have been hearing more and more pressure building on the European Central Bank to “normalize” their monetary policies. Most observers feel the time is far past for an end to the emergency overly accommodative monetary policies which include Quantitative Easing and negative interest rates. The Eurozone economy is already well advanced on a solid recovery path.
On Thursday, ECB Council member Nowotny (Austria) said “we are now in a situation where we (ECB) should end asset purchase program”. He added that halting the asset purchase program will bring a rise to long-term interest rates. Nowotny indicated that the ECB will decide on the future of the asset purchase program by September. There was a report on Thursday that ECB President Draghi had ignored calls by some ECB members for a clearer communication of the likely future path for interest rates. In the past week, ECB’s Coeure echoed President Draghi saying that EUR strength is already doing part of the tightening for the central bank. He sees no inflation risks at the present time.
GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium
Mon 5 Feb 2018
A All Day- Final Service PMIs
Tue 6 Feb 2018
A 03:30 AU- Reserve Bank Decision
B 13:30 US/CA- Trade
Wed 7 Feb 2018
A 15:30 US- EIA Crude
Thu 8 Feb 2018
AA 12:00 GB- Bank of England Decision
A 13:30 US- Weekly Jobless
Fri 9 Feb 2018
B 08:30 GB- Output
A 13:30 CA- Employment
Be sure to refer daily to Global-View to see the continuously UPDATED Economic Calendar and the Forex Forum for the complete list of key items (actual economic and central bank data, selected charts, etc.) as they are released. Since 1997, Global-View.com has featured live discussions by active traders of current developments in the forex market in a convenient timeline format. Our latest innovation is The Amazing Trader, which is an Expert Advisor (EA) you can load directly to your MT4 platform for assistance in trading various markets.
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."