FXStreet (Bali) – Michael Every, Head of Markets Research-Asia-Pacific at Rabobank, believes that the odds of a September Fed hike now seem lower than before following a disappointing FOMC minutes.
Key Quotes
“Yesterday’s Fed minutes effectively told us to ‘prepare for lift off’. However, that seems to be in the same way that one needs to be preparing for Christmas while we are still in August.”
“i.e., it’s something on the to-do list, but nothing more than a worry at the back of the mind for now for everyone except those strange retail folks who think it’s already time to be putting Christmas Cards on sale.”
“In short, the odds of a September Fed hike now seem lower than before – especially with CPI yesterday up just 0.1% MoM headline and core – meaning that it is likely to be 16 December before US rates go up (as our Fed watcher Philip Marey has notably been saying all year).”
“That message saw USD ‘stay on the beach’, with the broad dollar index falling from 96.8 to 96.3, while 10-year Treasury yields also dropped 9bp intraday to close at 2.13%.”
(Market News Provided by FXstreet)