Markets: What is most important in the week ahead? – Nordea Markets


In view of analysts at Nordea Markets, all eyes will be on the Fed this week, when the meeting minutes of the big U-turn FOMC meeting are out on Wednesday. 

Key Quotes

“Given the huge rally that Powell’s back-tracking has resulted in, we see risks tilted to the hawkish side ahead of those meeting minutes in general.”

“We look for clues on whether the Fed will be more concrete on a potential timing for the end of QT. For technical reasons, we know that quantitative tightening cannot run forever. The system probably needs at least USD 1,000bn in excess reserves, which could already be reached before the end of 2019 on our projections.”

Consensus has moved towards an October stop to QT (Fed’s Brainard said that she favoured a late 2019 QT-end on Thursday), so the Fed will have to hint at an earlier stop than that to really surprise dovishly now. We don’t put a large probability on that. The earlier a QT stop, the worse a scenario for the USD, the better a scenario for risky assets. We wouldn’t bet on dovish surprises though.”

“On Thursday, we will get new clues whether the recession fears could be fuelled further in the Euro area. And while we now see a little light at the end of the tunnel 4-5 months out, our models suggest another drop in the Composite PMI figure for the Euro area next week. Our monthly model suggests a drop in the range of 0.5-0.7 index points. Not really a figure that will keep the recession wolf from the door, at least not in the eyes of markets.”

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

EUR/USD surges above 1.1100 as Trump announces steps against China

EUR/USD is trading above 1.1100, up on the day. President Trump said he orders companies to search Chinese imports for drugs. Earlier he criticized Powell's lack of action. 

EUR/USD News

GBP/USD jumps above 1.2250 on USD weakness

GBP/USD is trading close to the monthly highs above 1.2250 as the US dollar falls following Powell's hint of cutting rates and Trump's angry response. 

GBP/USD News

USD/JPY plummets to ten-day lows below 106 as Trump goes berserk on Twitter

The USD/JPY came under strong selling pressure in the last hour and erased nearly 100 pips as US President Donald Trump's latest rant on Twitter forced investors to seek refuge and ramped up the demand for safe-haven JPY. 

USD/JPY News

Gold gains more than $30, eyes 2019 highs on Trump’s tweet

Gold continues to rise sharply amid concerns about the impact of the escalation in the US-China trade war. The demand for safe-haven assets emerged over the last hours, leading to a rally in the yellow metal. 

Gold News

Powell powerless against Trump's trade wars – US braces for recession, USD set to move

"The most powerful central banker in the world" – is how we and others characterize Fed Chair Jerome Powell. While that may be true – monetary policy is reaching its limits – especially in the face of a trade war.

Read more

MAJORS

Cryptocurrencies

Signatures


  •  
  •  
  •  
  •  
  •