A rather empty calendar day as attention turns to the Fed
Evergrande’s concerns are still on the line, but we can see the market pinching it as attention and attention now turns to the FOMC meeting later.
There is a perceived calm in the market right now, but I would say that says a lot more about investor indecision and nervousness rather than keeping a firm hand.
As for Europe, there is nothing on the agenda to shake things up, so all eyes will be on the Fed for more clues on trade sentiment today.
In this place, there is only one key thing to watch out for – and that is the “taper”.
If the Fed is indeed to slow down by the end of the year, this is the meeting to raise expectations on this given that there are only three more FOMC meetings (including) left.
The market does not expect an imminent cutback announcement and if it does, it will tend to be more hawkish than expected. It would also be a major surprise as Powell reiterated that they would have given a warning well in advance.
As such, they are expected to at least recognize that the reduction talks have started and that it is possible to set the stage for the reduction before the end of the year. Powell may be able to avoid the timeline, but it will be implied.
A key point to watch will be the changes to the declaration and the progress made by the economy. The problem with the Fed is that it doesn’t really have any different measures to start cutting and heading for rates take off.
As such, the market may still operate with a knee-jerk reaction to the dollar’s rise and yields if we see such hawkish changes in the Fed’s statement today.
If not, instead expect significant reduction signals to come via Powell’s press conference, if the Fed is smart enough to play it safe and make a clear distinction that the cut does not necessarily mean the central bank is. about to raise rates.
1100 GMT – US MBA Mortgage Applications September 17th
The US Weekly Housing Data measures how the number of applications for MBA-backed mortgages has changed over the week.
That’s all for the upcoming session. I wish you the best of the days ahead and good luck in your trading! Stay safe there.
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