This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Equity inactivity and the mild bounce in GBP/USD seen today have given a feeling that tonight’s FOMC statement and rate decision could be ‘much ado about nothing’. Prior to the FOMC decision, currency markets have been giving a 23% chance that rates would be increased in September with institutions thinking that December now appears to be the most popular start time.
The economic releases coming out of the US this week have not really helped convince the sceptics that Fed Chair Janet Yellen is ready to pull the trigger, as a continuation of her cautionary tactics looks the most likely outcome. As is frequently the case, it will be the accompanying comments attached to the decision that are most likely to lead trader’s sentiment.
The more seasoned market watchers will be conscious that the usual modus operandi from these events will ensure that the redundant phraseology will be open to interpretation by bulls, bears, hawks and doves.
The second profit warning in the last two months has seen shares in Premier Farnell fall 17% today as investors’ patience has been stretched too far. Weir Group, soon to be relegated out of the FTSE 100, has also seen its shares knocked as the recent mild bounce already appears to be running out of steam. Merlin Entertainment could be feeling the consequences of this summer’s Alton Towers disaster for some time to come as the company saw expected earnings to continue being affected into 2017.