Daily Alert: Thursday 22nd September 2016

Mark Nugent Daily Alert, Sept 2016


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.


It’s all about the Fed.


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

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