Morning Report: 06.30 London
- In reality, today is all about the Federal reserve meeting at 19.00. Any reaction to the morning economic items will be reversed or extended based on the FOMC announcement. Markets are pricing in a 0.25% hike, but it’s primarily the forward guidance that is of importance. Markets want to know how far and how fast interest rates will rise from here (if indeed they do this month).
- The dollar is unchanged this morning, with the USD/ JPY pausing after a good run this week.
- The main dollar pairs are mostly unchanged, with the GBP/ USD recovering after losses yesterday and the euro stuck in a trading range.
Coming up today:
- Aside from the Fed meeting at 19.00, we have a raft of European data starting with French Flash manufacturing PMI, followed by German and European data at 08.30 and 09.00. Services PMI is released at the same time in each case.
- European CPI follows at 10.00.
- From 13.30 we switch to the US for building permits and housing starts.
- The FOMC meeting announcement is at 19.00, with the press conference at 19.30.
Trade Idea:
- Today’s meeting is almost impossible to predict, but in previous Fed meeting it has often paid to note the underlying trend going into the meeting.
- In the case of the British pound, this is negative as Fed policy out marches MPC policy. Therefore there may be some value in betting on a continuation of the recent trend to see more downside.
- A good way to play this is a LOWER trade predicting that the GBP/ USD will close below 1.5000 in 14 days time for a potential return of 146%.
This is presented as an idea to stimulate fixed odds financial betting ideas and is not financial advice.
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