Markets pause ahead of FOMC

 

Equities edge lower

Activity in Asia was muted during this morning’s session, with no new developments on the trade negotiation front to drive trading and a looming Federal Reserve meeting cramping volumes.

US indices tended to drift lower during the morning, sliding between 0.07% and 0.08% while the Japan225 index under-performed with losses of about 0.3%.

Currencies were a bit more mixed, USD/JPY was little changed, AUD/USD rallied 0.06% while the pound under-performed after the latest YouGov poll showed a narrower margin between the Conservatives and Labour for tomorrow’s election. GBP/USD fell 0.14% to 1.3137, the first negative day in three days. Trendline support may be found around the 1.2965 level.

 

GBP/USD Daily Chart

Source: OANDA fxTrade

 

The “un-live” Fed meeting

Today’s calendar in very US-centric, with consumer prices for November the supporting bill before the FOMC meeting. Prices are expected to rise 0.2% m/m, a slower pace than October’s +0.4%. The Fed’s rate meeting is not expected to result in any change in rates, especially following last Friday’s stellar US jobs report for November. Indeed, market pricing implies zero chance of a rate cut at this meeting. If anything, the Fed can more convincingly say that the economy is in a “good place” and that they can afford to sit back and wait and see what happens to the economy.

The Fed is also due to release fresh economic projections which might introduce some excitement to an otherwise mundane statement. It could get interesting if growth forecasts were lowered.

 

The full MarketPulse data calendar can be viewed at https://www.marketpulse.com/economic-events/

 

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Andrew Robinson

A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentary and live market analysis throughout the Asia-Pacific region. Having previously worked in Europe, since moving to Singapore he worked with several leading institutions including Bloomberg, Saxo Capital Markets and Informa Global Markets, proving FX strategies based on a combination of technical and fundamental analysis as well as market flow information. Andrew began his career as an FX dealer with NatWest and the Royal Bank of Scotland in the UK.

Andrew Robinson