IronFX Daily Commentary by Sakis Paraskevov | 17/12/2015
December 17, 2015 9:45 am
• Fed hikes rates: Ends zero-rate era • The FOMC unanimously voted to increase the target range of the federal funds rate by 25bps. • In the statement accompanying the decision, the committee acknowledged considerable improvements in the labor market conditions and expects inflation to return to 2% as the transitory effects of declines in energy prices fade away. • The path of future policy will be determined by incoming data from the labor market and signs of inflationary pressures and inflation expectations. Overall, Fed officials expect economic conditions will evolve in a manner that only warrants gradual increases in the fed funds rate. • The “dot plot” median projections for 2016 were unchanged, showing that Fed officials still expects around 4 hikes next year. The dollar regained some of its lost glamour and strengthened against its major peers. • Today: • Norway: Norges Bank rate decision. The Bank is expected to remain on hold, as inflation is currently above target, despite the plunge in oil prices. The statement accompanying the decision is expected to be dovish and could provide strong signals regarding the likelihood of any further easing at their next meeting. Could prove NOK-negative. • Sweden: The official unemployment rate for November is expected to have declined, which could strengthen SEK. • Germany: Ifo survey for December. Given the ZEW survey exceeded expectations, we could see a positive surprise in the Ifo indices as well. This could strengthen EUR a bit. • UK: Retail sales ex-volatile items for November is expected to have rebounded from October’s decline. This could indicate growing demand in Q4 and support the GBP somewhat. • US: Initial jobless claims, Philadelphia Fed business activity index for December and Conference Board leading index for November.
• Fed hikes rates: Ends zero-rate era
• The FOMC unanimously voted to increase the target range of the federal funds rate by 25bps.
• In the statement accompanying the decision, the committee acknowledged considerable improvements in the labor market conditions and expects inflation to return to 2% as the transitory effects of declines in energy prices fade away.
• The path of future policy will be determined by incoming data from the labor market and signs of inflationary pressures and inflation expectations. Overall, Fed officials expect economic conditions will evolve in a manner that only warrants gradual increases in the fed funds rate.
• The “dot plot” median projections for 2016 were unchanged, showing that Fed officials still expects around 4 hikes next year. The dollar regained some of its lost glamour and strengthened against its major peers.
• Today:
• Norway: Norges Bank rate decision. The Bank is expected to remain on hold, as inflation is currently above target, despite the plunge in oil prices. The statement accompanying the decision is expected to be dovish and could provide strong signals regarding the likelihood of any further easing at their next meeting. Could prove NOK-negative.
• Sweden: The official unemployment rate for November is expected to have declined, which could strengthen SEK.
• Germany: Ifo survey for December. Given the ZEW survey exceeded expectations, we could see a positive surprise in the Ifo indices as well. This could strengthen EUR a bit.
• UK: Retail sales ex-volatile items for November is expected to have rebounded from October’s decline. This could indicate growing demand in Q4 and support the GBP somewhat.
• US: Initial jobless claims, Philadelphia Fed business activity index for December and Conference Board leading index for November.
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