FXStreet (Guatemala) – Kit Juckes, economist at Societe Generale noted the hawkish FOMC today.
Full text October FOMC statement
Key Quotes:
“They’ve hawked it up a bit, opening the door for a Dec hike as long as conditions are right. A data-dependent door?”
“This is dollar friendly and risk negative just because the market was looking for something more dovish after durables, after new home sales, after the drop in oil prices, etc. “
“I don’t think we’ll stay over-excited for long, but FX conclusions… 1) clear technical break out in DXY and so EUR/USD has a line on major support at 1.08 as 10yr US yields go up to keep the spread moving. 2) I doubt USD/JPY can go far ahead of the BOJ and even more so, with risk now looking a bit seasick. EUR/JPY will fall. 3) How much we sell the high-beta FX space off will depend on stocks I guess, though watch the RBNZ tonight cos in this mood, if they cut rates (it’s either today or in Dec),I reckon the dollar gets an additional policy-divergence lift. RBNZ is at 8pm GMT (in 95 minutes) and then on to tomorrow’s US GDP data where we react to an upside surprise (anything above 2% is $-friendly and then BOJ on Friday.”
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