All Articles Tagged - Fed

European Session – Dollar stabilizes near 2-week lows; European stocks up sharply on Yellen

Posted on March 30, 2016 at 2:42 pm GMT

European equities rose sharply on Wednesday with the major indices up over 1.5% as risk appetite made a strong comeback after Fed Chair Janet Yellen signalled again yesterday that the Fed was in no rush to raise rates. Yellen’s cautious stance contrasted with those of other Fed officials who last week had increased the possibility of a rate rise as early as April. Another Fed official speaking today tried to strike a more balanced tone. Chicago Fed President Charles Evans [..]

Cautious Yellen stands ground as Fed hawks circle

Posted on March 30, 2016 at 11:17 am GMT

The Federal Reserve did little to dispel confusion over US monetary policy as Fed Chair Janet Yellen yesterday stood firm with her dovish stance in the face of a rising number of hawkish voices from within the FOMC. Speaking at the Economics Club of New York, Yellen reiterated the need for caution despite several Fed officials last week expressing their confidence that the US economy is strong enough to withstand at least two more rate hikes this year. In the [..]

Asian Session – Yellen reiterates caution on rates; dollar slides 1%

Posted on March 30, 2016 at 8:05 am GMT

Fed Chair Janet Yellen yesterday reiterated the need to move cautiously with rate increases, citing the uncertainty in the global economic outlook as a risk to the US economy. Speaking at the Economic Club of New York, Yellen said the Fed wanted to get ahead of the developments in the global economy and adjust its policy path accordingly before they start to impact its forecast for unemployment and inflation. She noted that economic and financial conditions remain less favorable than [..]

Personal spending and PCE deflator misses estimates, hurts dollar

Posted on March 28, 2016 at 2:50 pm GMT

The first item of news following the Easter holiday was a negative for the US dollar, as personal spending missed expectations while inflation also came in lower than expectations. There was also a substantial negative revision of January’s personal spending growth (adjusted for inflation), to unchanged from an original +0.4% month-on-month growth rate. Starting with the personal income side, the news appeared encouraging as it posted a 0.2% increase (above expectations) from January, when it had risen by 0.5%. Wages [..]

‘Brexit’ fears haunt pound while Fed speakers wrong-foot dollar bears

Posted on March 24, 2016 at 3:39 pm GMT

Strangely enough from a financial markets’ viewpoint, the biggest loser from the Brussels terrorist attacks was the British pound. The attacks made ‘Brexit’ more likely according to analysts, as British voters might seek to distance themselves from the European Union and the terrorist attacks that took place first in Paris back in November last year and now in Brussels. Immigration is a key issue in the referendum. Furthermore, the resignation of a senior minister from David Cameron’s government during the [..]

Week Ahead – Important week for US data after rate talk triggers dollar rally

Posted on March 24, 2016 at 2:21 pm GMT

The coming week looks set to get busy after the long Easter weekend, particularly for the US, which will see some key data releases such as the monthly non-farm payrolls report. Also to come into focus will be the Bank of Japan’s Tankan survey, Eurozone flash inflation and manufacturing PMI out of China. United States The United States will be one of few Western markets open on Monday when many European markets will be closed for the Western Easter celebrations. [..]

Asian Session – Dollar eyes 113 yen as commodities continue to retreat

Posted on March 24, 2016 at 9:12 am GMT

Fed rate hike talk continued to drive the dollar higher on Thursday, helping the dollar index climb to a one-week high of 96.30 during Asian trading. St. Louis Fed President James Bullard was another Fed official to speak this week. In an interview on Bloomberg TV yesterday, Bullard said the Fed runs the risk of overshooting its inflation target. However, he also expressed concern about raising interest rates at a time of weak inflation expectations. The dollar attempted to break [..]

European Session – Dollar climbs to one-week highs but gold tumbles

Posted on March 23, 2016 at 3:34 pm GMT

European equity markets opened higher on Wednesday as fears of a wider security threat following the Brussels attacks yesterday receded. Helping market sentiment were improved business survey readings for the Eurozone and Germany, which got overshadowed yesterday from the terror attacks. The data included the flash Eurozone PMI numbers for March, which showed the first quarter looks set to end on a more positive note after the dismal start to the year. The dominant theme on Wednesday was the strength [..]

After a dovish FOMC, Fed speakers turn unexpectedly hawkish

Posted on March 23, 2016 at 12:42 pm GMT

The US Federal Reserve surprised markets at its FOMC meeting on March 16 when it took a much more dovish stance than what most traders had been expecting. Although a downgrade of the Fed’s projections on the US economy and its dot plot guidance of the fed funds rate had been expected, markets were taken aback by the overcautious tone of the FOMC statement. In the Fed Chair’s press conference, Janet Yellen downplayed the significance of the recent spike in [..]

Asian Session – Fed rate talk lifts dollar as market calm returns

Posted on March 23, 2016 at 9:17 am GMT

The dollar moved higher in Asian trading on Wednesday as risk aversion faded after the initial market reaction to the terror attacks in Brussels on Tuesday that saw a sell-off of risk assets. Stock markets in Asia were muted today as trading winds down ahead of the Western Easter holiday weekend. The greenback climbed against the euro and the pound but was unable to advance beyond yesterday’s rebound versus the yen. The dollar was last trading at 112.37 yen in [..]

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