Today’s trading session is all about the Fed and the guidance they offer in relation to interest rates and quantitative tightening. The announcement will be at 18:00, followed by a press conference with Fed chairman, Powell, at 18:30.
This evening could provide a new catalyst for the direction of the US dollar depending on the message the Federal Reserve deliver. This month’s announcement will see a new set of growth and inflation forecasts and a statement where many investors will be looking for one key word – patience. If the Fed do choose to reinforce a message of patience we could well see a softening of the greenback. Such a move would be exacerbated if the central bank decided to reign in expectations for 2 rate increases this year and/or maintain their plans to end quantitative tightening (selling bonds accrued during the period following the financial crisis) by year end. On the other hand, if the chairman opts for a positive tone and maintains rate guidance, the buck may have some bite left.
From a UK perspective, yesterday saw another stellar jobs report, with employment at the best levels since 1970 as the unemployment rate nudged lower to 3.9%. In addition, wages saw a healthy boost, reconfirming the impressive and robust nature of the UK labour market. As mentioned in Monday’s report, this week’s a busy one for UK data, sterling faces another test this morning. The latest set of inflation numbers are due for release at 9:30. Should price pressures pick up once again we could have a Bank of England which may well opt for another rate rise at the end of the Summer.
Written by Viv Savani. 8:41am, March 20th 2019
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8:18am, April 15th 2019
A holiday-shortened week but a big one for economic data…