Daily Alert: Thursday 22nd September 2016

Mark Nugent Daily Alert, Sept 2016

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Forex Analysis for Thursday 22nd September 2016
Economic Calendar

The Fed kept US rates unchanged at 25 to 50 basis points.

• There were three dissenters: George, Mester and Rosengren.
• The statement said that the case for a hike has strengthened but they will continue to look at the data.
• The decision to remain on hold was due to the slack that remains in the labour market and with inflation remaining below target.
• The dot plot shows a slower pace of easing compared to the June plot. 14/17 members see a single hike this year.
• As expected, the USD weakened, US equities rose and Treasury yields declined.

RBNZ Official Cash Rate was unchanged at 2.00%.

The statement said that current projections and assumptions indicate further policy easing will be required but then highlighted that excessive house price inflation poses a major concern to financial stability.

RBA (new) Governor Lowe stated that additional rate cuts are possible dependent on a variety of factors and added that it is not likely the RBA will run out of policy space. Furthermore, he commented that a lower AUD would be helpful and mentioned that inflation is to stay low for some time.

Market Reaction

Stock markets rise around the globe. Oil remains range-bound. On the currency markets the commodity currencies are rising, GBP grinds lower and the JPY strengthens.

Media

It’s all about the Fed.

Today

Draghi and Carney speak. I am not expecting anything significant to be said regarding monetary policy.

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