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15 Dec 2014
DXY, US bonds and equities brace for the FOMC meeting – DBS
FXStreet (Barcelona) - According to the DBS Team, for now the DXY is siding with bonds and equities as they brace for the FOMC meeting, which suffered due to the falling oil prices, with US 10Y bond yields easing to 2.08%.
Key Quotes
“There is a possibility that the Federal Reserve may drop “considerable time” from its FOMC statement. If so, this will be viewed as a first concrete signal that the Fed is on schedule to hike rates in 2015. US policymakers – US Treasury Secretary Jack Lew, Fed Vice Chairman Stanley Fischer and Council of Economic Advisers Chairman Jason Furman – have collectively called the recent plunge in oil prices as a net positive factor for the US economy by acting as a tax cut that boosts consumer spending.”
“Fed Chair Janet Yellen is not expected to deviate from the script during her post-FOMC press conference.”
“The DXY (USD) index, however, was not convinced. US bond and stock markets were unable to shake off the unabated fall in oil prices. Nymex closed last week below $60/barrel for the first time since Jul 2009. With supply-side price pressures seen on the downside, US 10Y bond yield eased to 2.08%, closer to the Fed’s 2-2.5% inflation target.”
“After a feeble attempt to rebound on better-than-expected US retail sales data on 11 Dec, the Dow Jones Industrial Average fell 315.51 points last Friday, its worst one-day fall since 9 Oct. The Dow closed at 17281, its lowest level since 31 Oct. For now, the DXY is siding with bonds and equities as they brace for the FOMC meeting in two days.”
Key Quotes
“There is a possibility that the Federal Reserve may drop “considerable time” from its FOMC statement. If so, this will be viewed as a first concrete signal that the Fed is on schedule to hike rates in 2015. US policymakers – US Treasury Secretary Jack Lew, Fed Vice Chairman Stanley Fischer and Council of Economic Advisers Chairman Jason Furman – have collectively called the recent plunge in oil prices as a net positive factor for the US economy by acting as a tax cut that boosts consumer spending.”
“Fed Chair Janet Yellen is not expected to deviate from the script during her post-FOMC press conference.”
“The DXY (USD) index, however, was not convinced. US bond and stock markets were unable to shake off the unabated fall in oil prices. Nymex closed last week below $60/barrel for the first time since Jul 2009. With supply-side price pressures seen on the downside, US 10Y bond yield eased to 2.08%, closer to the Fed’s 2-2.5% inflation target.”
“After a feeble attempt to rebound on better-than-expected US retail sales data on 11 Dec, the Dow Jones Industrial Average fell 315.51 points last Friday, its worst one-day fall since 9 Oct. The Dow closed at 17281, its lowest level since 31 Oct. For now, the DXY is siding with bonds and equities as they brace for the FOMC meeting in two days.”