15 Sep 2015
FOMC to offer a hawkish surprise? - TDS
FXStreet (Guatemala) - Analysts at TD Securities explained that the Fed is expected to stay put the September 17th meeting. But, with markets just pricing in a 1-in-3 chance of a hike for the decision we think it is appropriate to prepare for a hawkish surprise as the Fed will likely want to keep 2015 hikes alive.
Key Quotes:
"Note that the analyst community is nearly evenly split on expectations for this week’s meeting."
"We prefer to express a hawkish surprise through a long USD/JPY position. In the event of a more dovish outcome than is currently priced into markets, we think commodity linked currencies, especially AUD/USD will outperform."
"Combining these two positions is certainly not without its share of risks and may be suitable only for those with a more aggressive strategy and a higher risk tolerance. However, we think the relative responses of these two exposures—if they behave as we expect—favours gains overall from a total portfolio perspective."
Key Quotes:
"Note that the analyst community is nearly evenly split on expectations for this week’s meeting."
"We prefer to express a hawkish surprise through a long USD/JPY position. In the event of a more dovish outcome than is currently priced into markets, we think commodity linked currencies, especially AUD/USD will outperform."
"Combining these two positions is certainly not without its share of risks and may be suitable only for those with a more aggressive strategy and a higher risk tolerance. However, we think the relative responses of these two exposures—if they behave as we expect—favours gains overall from a total portfolio perspective."