Vi använder en mängd olika cookies för att du ska få den bästa användarupplevelsen. Genom kontinuerlig användning av denna webbplats godkänner du vår användning av cookies. Du kan läsa mer om vår policy för cookies och redigera dina inställningar här eller genom att följa länken längst ner på alla sidor på vår webbplats.
Fed cuts, but again, fails to flag fully-fledged easing cycle
It was a jam-packed night of news in financial markets, overnight.
A big night in global markets
It was a jam-packed night of news in financial markets, overnight. The US Federal Reserve cut interest rates by 25-basis points, as broadly expected, but proved too hawkish for the market’s liking. At that, looking at the central bank’s dot plots, the Fed is looking like a central bank divided. There were more fireworks in US short-term funding markets, sparking some level of concern and confusion. Tensions in the Middle East remain high, as US President Donald Trump demanded higher sanctions on Iran. And market participants, locally and abroad, continue to prepare for a big day ahead, with Aussie jobs numbers released, and more central banks meetings scheduled.
Fed cuts again, but avoids committing to further easing
Of course, it was never going to get any bigger than the US Fed’s meeting, and it’s driven most of the narrative in the past 24 hours. Indeed, rates have been cut, but the markets are seemingly disappointed. Positioned as another “insurance cut”, the Fed has stuck to its line that the US economy remains strong, and that recent rate cuts have only been implemented to manage downside risks to the US economy. Naturally, stocks sold-off on the news – however, Wall Street did rally into the close. While US Treasury yields lifted, and the US Dollar climbed, as traders moderate expectations for further monetary policy easing from the Fed.
US Fed’s dot plot implies no further moves from Fed
The most curious element of this meeting, as it was always going to be, was in the “dot plots” the Fed produced, to gain better insight into the potential path for future rate cuts. Leading into this meeting, the market was betting on four cuts from the Fed in the next 12 months – a clear signal the market fears a US economic slowdown. To market participants’ chagrin, the Fed’s dot plots came nowhere near market expectations. Though showing a mixture of views, with some Fed-members expecting higher rates and some much lower, the “median” view for the Fed implies no further cuts in the year ahead.
Is this a Fed divided?
That mixture of opinions on the Fed, more-or-less, sums up the key takeaway, at least as far as the punditry is concerned, from the meeting. We’re looking at a Fed divided. The hawks are saying that the strong labour market, robust consumption, and near-target inflation means rate cuts are necessary. The doves are suggesting the diminishing global growth outlook means that the Fed need to cut now to get ahead of the next economic slowdown. Such is the split in opinions on the Fed currently, at this meeting along, some members saw no need for a rate cut, while others saw the need for a 50-point cut.
Funky action in US money market causing anxiety
Of other pertinent US financial news overnight, and anxieties are still high because of some curious activity in US short-term money markets. The Fed – totally independent of its meeting – had to step in to support financial markets during North American trade with extra funding to push-down a spike in short-term interest rates. This has been happening all-week, and an absolute explanation for the dynamic is still being searched-for. However, it is leading to some level of fear that the activity in money markets portends a deeper, more troubling problem, which could lead to a blow-out in interest rates, and cause pains throughout the financial system in the near future.
Oil still volatile on mounting tensions in Middle East
Outside of the Fed, and tensions in Middle East remain elevated, with volatility in oil markets relatively high. The chances for outright conflict in the region still appears to be growing, with the Saudi’s re-affirming publicly last night their conviction it was Iran who were behind the weekend’s drone attack on one of its key oil facilities. In addition to this, US President Donald Trump announced his desire for further sanctions on Iran. Oil prices dropped last night, with WTI Crude shedding nearly 2%, unaided by a weaker than expected drawdown in US crude oil inventories last week.
A full economic calendar; local jobs data in focus
The Bank of Japan, Swiss National Bank and Bank of England all meet today, and will highlight the global economic calendar, globally. But locally, the big news will be the release of Australian labour market data. The unemployment rate ought to hold at 5.2%, courtesy of 15k jobs added to the economy. The key issue for the RBA right now is “spare capacity” in the labour market. A miss in today’s numbers would only compound that issue, and likely lead the market to boost bets that another rate cut will be coming from the RBA before November.
Denna information har sammanställts av IG Europe GmbH och IG Markets Ltd (båda är IG). Utöver friskrivningen nedan innehåller materialet på denna sida inte ett fastställande av våra handelspriser, eller ett erbjudande om en transaktion i ett finansiellt instrument. IG accepterar inget ansvar för eventuella åtgärder som görs eller inte görs baserat på detta material eller för de följder detta kan få. Inga garantier ges för riktigheten eller fullständigheten av denna information. Någon person som agerar på informationen gör det således på egen risk. Materialet tar inte hänsyn till specifika placeringsmål, ekonomiska situationer och behov av någon specifik person som får ta del av detta. Det har inte upprättats i enlighet med rättsliga krav som ställs för att främja oberoende investeringsanalyser utan skall betraktas som marknadsföringsmaterial. Se fullständig friskrivning och kvartalsvis sammanfattning.
Realtidskurser på de mest populära marknaderna
Detta kanske intresserar dig…
Vi har en transparent avgiftsstruktur. Läs mer om vilka avgifter du eventuellt får betala för din trading.
Ta reda på varför så många kunder väljer oss och vad som gör oss till världens största CFD-leverantör.
Håll dig uppdaterad om viktiga marknadshändelser med hjälp av vår ekonomiska kalender.