FOMC: No urgency to raise policy rates - NBF

Sandeep Kanihama FXStreet Contributor

Analysts at National Bank Financial, suggest that today’s Fed rate setting meeting will be held on the heel of a month characterized by both global and domestic stock market weakness, which has contributed to some tightening of U.S. financial conditions.

Key Quotes

“Looking at the real side of the economy we note that the Economic Surprise Index has improved slightly since the September FOMC meeting. However most of the gain may be attributed to survey data rather than hard data, which have largely remained softer than expected.”

“In that context, we do not see why the FOMC would feel any urgency to raise its policy rate on November 8th. This said, in light of our economic projections, we think the Fed remains on track to deliver one more rate hike this year, but in December. That would be consistent with last week comments by the Fed’s new vice chair Richard Clarida, who, in his first public speech, said he thought “some further gradual adjustment in the policy rate range will likely be appropriate.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

AUD/USD holds firm near 0.7000 after Chinese inflation, trade data

AUD/USD stays firm near 0.7000 in Wednesday’s Asian session, picking up some bids after China's mixed inflation and upbeat trade data. CPI rose less than expected in September, while PPI inflation picked up. Meanwhile, the Chinese trade surplus unexpectedly widened in September. The pair remains underpinned by a broadly subdued US Dollar, despite the Middle East escalation, as focus remains on US CPI data.

USD/JPY consolidates near 158.50; looks to US CPI for fresh impetus

USD/JPY stays range-bound near 158.50 in the Asian session on Wednesday, with looming intervention risks supporting the Japanese Yen and capping upside amid a softer US Dollar. However, geopolitical uncertainties act as a tailwind for the safe-haven USD and the pair. Traders also seem hesitant ahead of the release of the latest US inflation figures.

Gold looks to $4100 and US CPI inflation amid geopolitical risks

Gold falls for the third straight day on Wednesday, as the recent recovery falters ahead of US inflation. US Dollar pauses correction amid rising Oil prices and stabilizing US Treasury bond yields. The daily bearish RSI remains a headwind for Gold buyers, with $4,100 seen at risk.

Strategy bitcoin buying model faces scrutiny as STRC costs climb

Strategy’s (MSTR) STRC financing strategy increased its Bitcoin (BTC) holdings in H1, but made its capital structure more expensive, prompting an examination of its effectiveness, according to a Tuesday report by K33. STRC recovered close to its $100 par value, closing at $99.90 after an extended period of heavy buybacks.

What happens after a US Treasury market crash

The global bond market is under severe pressure as US Treasury yields reach multi-decade highs, driven by persistent inflation risk, heavy government and corporate debt issuance, and expanding term premiums. Higher yields raise borrowing costs and tighten financial conditions, but a severe bond selloff can ultimately shift investor focus from inflation to growth and financial stability.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?