Markets may be disappointed by lack of explicit Fed commitment to ease rates - TD Securities


"Given the market's pricing for an additional 65bp of cuts for the rest of 2019 amid renewed trade tensions, investors will be even more focused on the annual Jackson Hole Symposium next week," notes TD Securities analysts.

Key quotes

"The market will be looking for signs that the Fed is willing to cut rates more than warranted by a "mid-cycle adjustment" in policy. Investors will also be watching for any signs of change in the Fed's inflation framework."

"We don't think that the Fed will provide much new information on either front. Jackson Hole is an academic conference and not the appropriate forum to announce a change in policy. The Committee is also divided on the outlook for rates and the impact of weak global growth and trade uncertainty on the US remains uncertain."

"Finally, even though the yield curve has inverted, the S&P is only 5% off the highs and CDX IG is only 10bp wider this month. Thus financial conditions have not tightened materially. Markets may be disappointed by the lack of an explicit Fed commitment to ease rates. We think this can continue the bull flattening trend in US rates and remain long 10s and biased towards 5s30s flatteners."

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

AUD/USD stays under pressure around 0.6830 while beginning the NFP day

AUD/USD declines to 0.6830 during the initial Friday morning in Asia. The quote stretches losses made on Thursday as the second-tier Aussie data becomes the latest disappointment.

AUD/USD News

USD/JPY steady at 200-DMA ahead of critical US NFP data

Steady below the 200-day moving average, Yen fell from 108.97 to 108.66 overnight as positive trade deal headlines flowed through the news wires and helped US stocks eke out further gains. Risk appetite was solid into the close on Wall Street overnight.

USD/JPY News

US Non-Farm Payrolls November Preview: Labor market continues to defy concerns

Non-farm payrolls are predicted to rise 180,000 in Nov following Oct’s 128,000 increase. The unemployment rate is expected to be unchanged at 3.6%. Hourly earnings will gain 0.3% in Nov after October’s 0.2% increase and annual earnings will be stable at 3.0%.

Read more

Gold: Modestly changed to $1475 as markets turn cautious ahead of US NFP

Gold fails to extend the previous day’s recovery while trading near $1475/76 amid Friday’s Asian session. That said, the yellow metal registers failures to close beyond 50-day EMA for the third consecutive day.

Gold News

GBP/USD: 1.3180 holds the key to further upside

GBP/USD traders modestly changed around 1.3160 by the press time of early Asian session on Friday. That said, overbought conditions of the 14-day Relative Strength Index (RSI) and the recent stop in north-run make buyers doubtful.

GBP/USD News

Forex MAJORS

Cryptocurrencies

Signatures