18 Aug 2015
Agnostic about Fed lift-off in Sept or Dec - Nomura
FXStreet (Bali) - Nomura Cross Rates Strategy Team wrote a not to clients end of last week, noting that they remain increasingly agnostic about whether the Fed hikes rates in September or December.
Key Quotes
"The sand in the hourglass is slipping through as we prepare for the end of summer doldrums and ahead of the highly anticipated September FOMC meeting."
"We are increasingly agnostic about whether it hikes in September or December (we doubt the Fed will launch the first hike in nearly 10 years on a non-press meeting)."
"Before we get to the September finish line, we will need to digest the July FOMC minutes and a few more rounds of Fed speakers, for sure."
"In the minutes, we will be watching to see why it shifted the language to “some further improvement” in the labor force before liftoff."
"Although the China news picked up this past week due to the change in fixing regime, we will all be scanning for any concerns of what is going on in China."
"Even though with each passing day the Fed told us we are getting close to the start of the hiking cycle, most recent FOMC events have been leaning towards the dovish side."
"The collective message relayed from recent statements, press conference, minutes, as well as lowered Fed dots seems to point a slower hiking cycle and a lower terminal rate."
"Lower commodities, subdued inflationary pressure, and global growth concerns have been consistently shifting the balance of risk toward a later and slower hiking cycle, especially in light of rapid tightening of financial conditions in the markets even before the first hike as the USD strengthened and long end yields rose."
Key Quotes
"The sand in the hourglass is slipping through as we prepare for the end of summer doldrums and ahead of the highly anticipated September FOMC meeting."
"We are increasingly agnostic about whether it hikes in September or December (we doubt the Fed will launch the first hike in nearly 10 years on a non-press meeting)."
"Before we get to the September finish line, we will need to digest the July FOMC minutes and a few more rounds of Fed speakers, for sure."
"In the minutes, we will be watching to see why it shifted the language to “some further improvement” in the labor force before liftoff."
"Although the China news picked up this past week due to the change in fixing regime, we will all be scanning for any concerns of what is going on in China."
"Even though with each passing day the Fed told us we are getting close to the start of the hiking cycle, most recent FOMC events have been leaning towards the dovish side."
"The collective message relayed from recent statements, press conference, minutes, as well as lowered Fed dots seems to point a slower hiking cycle and a lower terminal rate."
"Lower commodities, subdued inflationary pressure, and global growth concerns have been consistently shifting the balance of risk toward a later and slower hiking cycle, especially in light of rapid tightening of financial conditions in the markets even before the first hike as the USD strengthened and long end yields rose."