The US central bank has clearly signalled that a first interest rate hike in
December is not off the table yet. According to Thu Lan Nguyen, analyst at
Commerzbank, the market is now focusing on US economic data, especially from the
labour market.
Key Quotes
“While investors had
basically given up the possibility of the Fed lift-off occurring this year, the
Fed – at its meeting on Wednesday – kept the door wide open for a rate hike in
December. The change in its statement where it now explicitly refers to a rate
move "at its next meeting” has sent a clear signal.
“Obviously, the
market is not entirely convinced of a December rate hike, even with the strong
signals from the Fed. This is hardly surprising considering the multitude of
potential stumbling blocks on the way there”.
“Consequently, the market
should shift its focus towards US data where some high-profile releases are due
out in the next few days...And with the Fed putting particular emphasis on a
labour market improvement, most attention will certainly be paid to the labour
market report”.
“Solid payrolls growth as forecast by our economists
should increase the markets faith in an interest rate hike and provide
additional tailwinds to the USD”.
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