Alerts

Dovish FOMC, BoE Fee Determination, Euro Finds a Bid – US Market Open

Market Themes and Movers – FOMC, BoE Determination, Euro, JPY and NOK in Favour

USD: Wednesday’s FOMC assembly revealed a dovish US central financial institution with additional rate of interest hikes in 2019 now wanting most unlikely. The Fed hinted at a zero.25% hike in 2020 however markets at the moment are pricing-in a lower in charges in 2020 as development issues proceed. The central financial institution additionally reigned in its bond normalization program with gross sales anticipated to cease by the top of September, three months sooner than had been anticipated by some market commentators. US Treasury yields fell to multi-month lows, dragging the US greenback down.

GBP: The Financial institution of England is absolutely anticipated to go away all financial coverage settings unchangedat in the present day’s MPC assembly as Brexit continues to cloud the UK’s financial outlook. Latest jobs, wages and retail gross sales knowledge has crushed market expectations and highlights a rising divergence between strong employment and weak financial development. The Financial institution of England might want to tread fastidiously as soon as/if Brexit is resolved.

EUR/JPY/NOK: Each the Euro and the Japanese Yen reacted positively to the end result of the FOMC assembly and pushed forward in opposition to the US greenback. Whereas good points could also be restricted within the short-term, each might proceed to search out favour going ahead and press by means of current resistance ranges. The Norges Financial institution raised rates of interest by zero.25% to 1.zero% in the present day, as anticipated, and signalled one other hike in H2 this 12 months, boosting the worth of the Norwegian Krone additional.

Chart of the Day – Multi-Month Low 10-Yr US Treasury Yield

Dovish FOMC, BoE Rate Decision, Euro Finds a Bid - US Market Open

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— Written by Nick Cawley, Market Analyst

To contact Nick, electronic mail him at Nicholas.Cawley@ig.com

Observe Nick on Twitter @nickcawley1


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