ZuluTrade Blog

Market Recap – FED dots reveal rate cuts to sustain expansion

Market View | Thursday, June 20, 2019 10:25 AM GMT

It’s been the first time since the beginning of the dot era (on January 2012 it was the first time that the FED communicated the FOMC participant’s assessment of appropriate monetary policy, in a plot) that the dots are pointing lower.

The US Core PCE expectations were revised downwards to 1.8%, the job market and the consumption are continuing drawing a positive picture, but on the other hand there is a weaker sentiment and both investments & manufacturing activity are decreasing. The FED was not expected to raise rates at the yesterday’s meeting, given the recency of events at the US-China trade front, but the debate has already turned to a 25bps rate cut or a 50bps rate cut at the July’s meeting. This has sent USD lower and equities & oil higher.

Another worh-noting development has been the significant decrease of USDCNY, 10 days before the upcoming G20 meeting. Today’s release of the Chinese trade balance has beat expectations.

The BOJ (Bank of Japan) continued its accommodative monetary policy. Later today, at 9.00GMT it is the Norges Bank’s (Central Bank of Norway) turn to announce its monetary decision, that could potentially be a rate increase sending the NOK higher. On 12.00GMT, it is the turn of the BOE (Bank of England) to announce its monetary policy decision.

Macro releases: Other than the monetary meetings of the Central Banks described above, there is no potentially market moving release sheduled for today.



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