Federal Reserve

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Volatility in the markets is very likely to continue and even increase in the coming months. This could provide many profitable opportunities to the savvy trader. Geo-political risk is moving to the forefront of investors’ minds at present and is guaranteed to be increasingly influential in decision making for the remainder of 2016. We have the imminent Brexit referendum taking place on 23rd June; since its announcement on 20th Feb we have seen high volatility in Cable with…

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As predicted, the Federal Reserve kept short-term interest rates unchanged at near zero yesterday but signalled that a rate hike before the turn of the year remains a possibility. As was the case in September, the central bank’s accompanying statement did not explicitly mention concerns over the Chinese economy as a reason not to raise rates for the first time in a decade. Last month they cited turbulent financial markets and uncertain economic developments overseas as reasons fo…

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The Federal left short-term interest rates unchanged ending weeks of debate whether it was the right time to end an era of near-zero rates in acknowledgment of the ever improving US economy and job market. A majority of Fed officials still believe the central bank will raise rates before the end of 2015, but the central bank showed a little less conviction with the number of officials in favour slipping to 13 from 15 back in June. Janet Yellen noted in a press conference after th…

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Speculation and anticipation is growing and not just among economists, as Fed Chairman Janet Yellen is running out of excuses not to raise interest rates at next week’s Federal Reserve policy meeting. It seems that just about every indicator is saying a move would cause government bonds and the equity market little disruption but the debate remains whether the US economy has recovered sufficiently to allow the tightening of monetary policy to begin. Investors and the public…

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To understand the Japanese Yen’s movement it is important to understand the term that is readily banded around as the reason for the currency’s depreciation, Abenomics. (See footnote explaining Abenomics) Further Stimulus On the 31st of January the Bank of Japan voted 5-4 surprising markets to increase its monetary base by 60 to 70 trillion Yen. The unprecedented move pushed the Nikkei to a 7 year high as USDJPY quickly depreciated. Latest Abe Announcements:…

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The Bureau of Labor Statistics will release the monthly US Jobs data (non-farm payrolls) for October at 13:30pm. The figure is closely watched by traders as t the strength of the US recovery and future Fed policy. The consensus expectation is an increase of 235,000 jobs and an unemployment rate of 5.9%, slightly below September’s +248,000. On Wednesday the ADP Private Payrolls report for September printed an increase of 230,000 jobs. Seasonal As the unemployment rate…

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Spot Gold is currently trading around the $1,205 level today, near its three-week low as the dollar strengthened across the board following the Federal Reserve’s decision to end its asset-purchase program known as ‘Quantative Easing’ last night. Fed officials, who voted on whether to proceed with plans to end the monthly bond-buying or not, dismissed recent turmoil in global financial markets and weak inflation figures, instead focusing on employment gains as they sig…

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It is the 1st August and the first Friday of the month, and today the US Bureau of Labor releases their employment figures, Non-Farm Payrolls at 13:30 (London,UK). In the last few trading sessions, the USD has been bid against the majors, following Federal Reserve’s announcement of further tapering and policy statement that interest rates are not too far off. This has seen US indices trade lower, and Gold weaken by $20, now trading $1282/oz. Recent data: Initial jobless cla…

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Today is a rarity for the financial markets; the US employment report (Non-Farm Payrolls) is being released on a Thursday, not the first Friday of the month. This is due to the Friday being Independence Day (July 4th) in the US, a national holiday. The economic release coincides with the ECB press conference; US average earnings, US initial and continuing jobless claims. Each of these data points should impact the markets, with all being released together; it could lead to confusion an…

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The eagerly anticipated monthly US employment release is today at 13:30 BST (London). The Depart for Labor releases the Non-Farm payroll employment report, which covers jobs in goods, manufacturing, and construction companies but excludes farm workers, non-profit organisations and private households. This release will closely watched by traders following the abysmal US Q1 GDP release of 0.1% growth. The figure was a huge disappoint, though the cold weather has been largely blamed for t…

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The Federal Open Market Committee (FOMC) will release their policy update at 19:00 (BST) this evening. It is expected that Chair Janet Yellen will announce that they will taper the amount of monthly asset purchases by a further $10 billion. The asset purchases are split between Treasuries and Mortgage Backed Securities (MBS). Since the tapering begun under previous Chairman Bernanke, the FOMC has voted unanimously each month to reduce the purchases by $10bn; any deviation from this is…

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The new chairman of the Federal Reserve Janet Yellen continued where Ben Bernake left off. On Wednesday evening the it was announced that the Federal Reserve would taper their monthly asset purchases by $10bn in April, as they had in recent months, easing the US economy from the stimulus as growth begins to gain pace. As expected interest rates were left unchanged at the record low of 0.25%, but hinted that rates could rise in 2015, which would be about 6 months after it is has finished its…

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The Federal Open Market Committee concluded their two day meeting on Wednesday and voted unanimously to taper the level of monthly asset purchases by $10bn from the 1st February. At Ben Bernanke’s final meeting, the reduction of asset purchases was split equally between Treasury’s and mortgage-backed securities (MBS). The pace is now expected to continue with a monthly reduction of $10bn as the Fed attempts to wean the US economy from the ultra loose fiscal policy. Some ana…

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The Federal Open Market Committee (FOMC) minutes will be released today at 7pm (London). Traders are awaiting the release of the December meeting minutes, as it was the first time that the Fed began tapering their monthly asset purchases, a reduction of $10bn for this month. Prior monthly purchases had totalled $85bn, with a reduction to $75bn for this month. The flooding of the markets with cheap money, fuelled by central bank QE, and now the removal of the stimulus have been key them…

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On Wednesday evening (London) the FOMC completed their two day meeting and announced the Fed would start tapering the amount of assets purchased each month. Analysts and market commentators were mixed as to their views, with the minority expecting Bernanke to act in December with the majority believing the Fed would wait until January or even March. The release came at 7pm London that the Federal Reserve is reducing the current level of asset purchases to $75bn from the previous monthl…

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