FXStreet (Guatemala) – Analysts at Rabobank noted the key events coming up that brings the FOMC as the main event.
Key Quotes:
“As if all that were not enough to keep markets on tenterhooks, today also sees the outcome of the FOMC meeting. For a global economy already struggling (note Brazil’s retail sales were -8.5% YoY yesterday, and trade data from India, Indonesia, and Korea have been terrible) the prospect of higher US interest rates, and also of a stronger USD, is deeply concerning. Parts of the US economy might say the same thing: housing starts were much weaker than expected yesterday, but building permits were far stronger – but the strength was in units built to rent rather than single-family homes, which is not the US economy we used to know even if it is growth.
Ahead of the main show in the US today we do have some data to look at though: UK unemployment will likely fall further again, and average weekly earnings are also expected to rise to 2.1% YoY; the BOE’s last set of minutes will display how they are reading exactly those kinds of trends; and in Europe we will see the final May CPI reading (expected unchanged at 0.2% MoM, 0.3% YoY, and 0.9% YoY core.)
But back to the Fed: Chair Janet Yellen will face the usual tricky task of a post-meeting press conference. Today’s event might prove even trickier for Mrs Yellen should there be questions over the criminal investigation into the alleged leak of Fed information ahead of its official release (“Inconceivable!”), and/or the Federal court ruling yesterday that the Fed’s 2008 bailout of AIG was illegal (“Inconceivable!”). Indeed, that one of the policy tools that the Fed was forced to use after the Lehman crisis has been given the legal thumbs down just as a potentially similar event (and I stress the word potentially) appears on the market horizon in the form of Grexit will no doubt be viewed with extreme irony by future historians.”
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