USD: The greenback remains the strongest currency in the longer term as the market currently expects
the Fed to raise rates in late 2015 or early 2016.
The FOMC needs to be reasonably confident about inflation tracking towards 2% before increasing the fed
funds target rate for the first time in nearly a decade. On October 15, CPI for September came in unchanged
for the year while Core CPI ticked up to 1.9%.
The Fed kept rates on hold at the October 28 meeting, and struck a hawkish tone with the statement suggesting
a rate rise at the December meeting is quite possible. Advance GDP for Q3 slightly missed estimates at 1.5%
versus 1.6% expected.
The employment release for October, released November 6, came in much better than expected across all three
major components; Non-Farm Payrolls came in at 271,000 versus 180,000 expected, Average Earnings at 0.4%
versus 0.2% expected, and the Unemployment Rate at 5% versus 5.1% expected.
Fed Funds futures implied probability for a December 16 rate hike jumped from 30% to near 70%, after the NFP
release.
Accordingly the USD boomed across the board. The Fed have given strong and clear signals to the market via
their various means of communication during October and November that they intend to increase the Fed Funds
target rate by 25 basis points to 0.50% very soon, and the December meeting is a good opportunity to do so.
the Fed to raise rates in late 2015 or early 2016.
The FOMC needs to be reasonably confident about inflation tracking towards 2% before increasing the fed
funds target rate for the first time in nearly a decade. On October 15, CPI for September came in unchanged
for the year while Core CPI ticked up to 1.9%.
The Fed kept rates on hold at the October 28 meeting, and struck a hawkish tone with the statement suggesting
a rate rise at the December meeting is quite possible. Advance GDP for Q3 slightly missed estimates at 1.5%
versus 1.6% expected.
The employment release for October, released November 6, came in much better than expected across all three
major components; Non-Farm Payrolls came in at 271,000 versus 180,000 expected, Average Earnings at 0.4%
versus 0.2% expected, and the Unemployment Rate at 5% versus 5.1% expected.
Fed Funds futures implied probability for a December 16 rate hike jumped from 30% to near 70%, after the NFP
release.
Accordingly the USD boomed across the board. The Fed have given strong and clear signals to the market via
their various means of communication during October and November that they intend to increase the Fed Funds
target rate by 25 basis points to 0.50% very soon, and the December meeting is a good opportunity to do so.
Have an INVESTOR Mindset, but Trade like an ENTREPRENEUR