Chris Turner, Global Head of Markets at ING, notes that the two key market takeaways from yesterday’s FOMC meeting are (a) that the Fed stands ready to support market functioning by keeping asset purchases at least at the current pace and (b) that it is not envisioning any hike through 2022.
"Putting aside some unmatched expectations on yield curve control, the continued dovishness of the Federal Reserve should bode well for a continuation in the risk rally."
"At the same time, the FOMC added another element to the USD bearish argument. And now, with the yen also jumping after the FOMC announcement, it is starting to look like a cleaner weak-USD story, not only to the benefit of procyclical. The Fed has however been overshadowed in the Asian morning by increasing concerns on second Covid-19 waves, especially in the US, with cases in America that re-opened earlier starting to surge again. This has obliterated the FOMC impact on markets, which started the day on a firmly defensive stance with the dollar, gold and treasuries all turning positive."
"Today, the US jobless claims will be watched, as investors search for some confirmation to their recent optimism on the US jobs market. However, it has been reported that the weekly jobless claims report may overestimate the actual unemployment numbers as a portion of the claimants are allowed benefits but do not count in the unemployment numbers, which may help explain the misalignment with the NFP in May. The market reaction function today may start to tell us whether the release is losing some centrality."
Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.
© 2011-2020 TeleTrade-DJ International Consulting Ltd
TeleTrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.
The company operates in accordance with Markets in Financial Instruments Directive (MiFID).
The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. TeleTrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.
TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.
TeleTrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.