Wednesday, October 28, 2015

All roads lead to US October FOMC rate decision - TDS

FXStreet (Delhi) – Prashant Newnaha, Rates Strategist at TD Securities, notes that the October FOMC decision is in full view, with the market left to pore over the statement (no presser or dots) in order to glean any hint of the Fed’s bias.

Key Quotes

“The key question investors will look to answer will be whether recent slowing in economic growth momentum is sufficient to rule out a December rate hike, or whether the Fed will continue to keep the 2015 dream alive.”

“A downgrade to the economic assessment or outright capitulation on 2015 hikes could help bull steepen the curve, but if the Fed refuses to capitulate, we could see curve flattening momentum take the reins.”

“Aside from the Fed, the advance September trade balance will be closely watched, expected to narrow modestly to -$65.7bn from -$67.2bn. Treasury will also auction $35bn in 5s just an hour before the FOMC decision, with averages suggesting a stop 0.2bp through the screens and 66% buy side takedown despite uncertain prospects.”

Click here for our in-house preview on FOMC rate decision titled: “FED's meeting: no gold pot at the end of the rainbow.”
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