FXStreet (Guatemala) – Analysts at TD Securities noted a number of outlooks in respect to the current climate with the FOMC statement and ECB announcements released earlier in the week.
Key Quotes:
“We continue to expect the Fed to hike in Q1 2016. We expect the ECB to cut policy rates by 20bps and to announce an extension to QE (something akin to QE infinity) at the Dec meeting.
We expect fewer/later hikes from EM CBs (no more hikes forecast in 2015) and easing from India and Russia to continue, with Indonesia cutting rates in Dec/Jan.
A hawkish Fed rhetoric can keep EM FX on the back foot. But China risks have eased in October, helping EMFX to rally. Market complacency on Turkey political risks remains.
Industrial metals need China optimism for takeoff, Fed dynamics to prompt gold to ease and oil weighed down by chronic oversupply.
Expect flatter 3s10s and 5s30s US curves as the market prepares for a Q1’16 Fed hike. Biased to 2s10s steepeners in EUR as the ECB paves the way for more QE.
Remain neutral on USD. EUR/JPY lower on more ECB QE. Get short the NZD. Hedge long risk positions with AUD/JPY put option.”
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