Federal Reserve's meeting could trigger stock sector rotation

Investor Signposts Week Beginning September 18 2017
World Week Ahead: Eyes squarely on Fed
Author

21 September, 2017

The yen's recent drop against other currencies, such as sterling, has had some spillover impact and lent added support to the dollar versus the yen, traders say.

CENTRAL BANK WATCH: In Europe, investors are monitoring a speech by Bank of England Governor Mark Carney for confirmation that the bank expects to raise interest rates in coming months for the first time in a decade.

The pan-European Stoxx 600 edged down by around 0.21 percent shortly after the opening bell, with nearly all sectors and major bourses in negative territory.

The ICE U.S. Dollar Index DXY, -0.12% which measures the greenback against six of its rivals, was little changed on Wednesday morning at 91.767, on course for a second session of losses.

With CME group's FedWatch tool now placing the odds of a December rate hike at about 50% Investors will be also be looking closely for any hints from the bank regarding its interest rates plans as a more hawkish outlook from the Fed could bolstered the US Dollar as markets price in a rate hike at the end of the year.

Markets have priced in a zero chance of change to US interest rates, but near-certainty to the Fed beginning to unwind its $4.5 trillion balance sheet, a process it previously said it would begin "relatively soon".

CME's FedWatch tool now places the odds of a December rate hike from the Fed at about 50/50 so the tone of this week's meeting could have considerable impact on US Dollar sentiment, especially should the Fed remain committed to one final rate hike in 2017.

Economists and investors are divided over the likely outcome as well, with different analyses of the market price for federal funds futures contracts putting the likelihood of a rate hike in December as low as 43 percent and as high as 56 percent.

Full-Length Trailer for Lady Gaga Documentary 'Gaga: Five Foot Two'
Gaga revealed to fans a week ago that she had been diagnosed with Fibromyalgia , a disease that causes chronic joint pain. Lady Gaga is a bundle of contradictions and she tries to unwind them in a new documentary, " Gaga: Five Foot Two ".

Pakistan, World XI team look for final flourish in 3rd T20I
In the end, the momentum lost during his stay could have proven to be costly for the World XI if not for Perera's late assault. Azam added 122 for the second wicket with Ahmed Shehzad (39) as Pakistan built on the loss of opener Fakhar Zaman for eight.

Jennifer Garner cries over 'Hamilton' while delirious on anesthesia
Lin-Manuel Miranda 's Tony-winning musical Hamilton has moved millions of fans since its debut on Broadway in August 2015. To that, we must say thank you from the bottom of our hearts for this magic. "They did the sad part of Hamilton ".

On Thursday, the Bank of Japan will also hold a regular policy meeting, and is widely expected to maintain the status quo as inflation remains stubbornly weak despite a modest economic recovery.

Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in NY, said "the primary reason US yields are creeping up is that thinking about it clearly, the market has decided that the Fed is unlikely to change the December 2017 dot - still saying they expect one more rate hike in 2017". The comments were made ahead of U.S. President Donald Trump's first address before the United Nations on Tuesday as foreign leaders gather in NY to discuss how to deter North Korea from enhancing its nuclear capability.

Currency markets had a muted reaction to Trump's latest comments on North Korea. Gold hit a 2-1/2 week low, with spot gold XAU= down 0.6 percent at $1,311.51 an ounce. Whilst the speech earlier today didn't have much of an effect on currency markets, if there was an escalation between the USA and North Korea there would definitely be volatility.

The U.S. 10-year Treasury yield had reached a one-month high of 2.237 percent on Monday.

'The Fed won't want to commit to another rate hike until it is sure that activity is rebounding after the storm disruption'. On Friday, it had risen to as high as $1.3616, the strongest since June 24, 2016. The euro strengthened to $1.1968 from $1.1945.

In the NY session, US existing home sales data for August and crude oil inventories data are slated for release.

Regarding commodities, oil prices were in an uptrend during the Asian trading, with WTI crude rising by 0.52% to $50.15 per barrel and Brent being 0.13% higher at $55.69.

Shanghai gained 0.1 percent, while Singapore and Sydney each gained 0.2 percent.


More news


  • 'Kingsman: The Golden Circle' Review: The Same Outrageous Style

    'Kingsman: The Golden Circle' Review: The Same Outrageous Style

    Now I am generally a quiet moviegoer and whenever someone belts out laughing or gasps in the seat next to me I glare angrily. Perhaps his agent will look into booking him some more action comedies because his performance left me wanting to see more.
    Bullet Train Project aimed at reaping benefit in Gujarat poll

    Bullet Train Project aimed at reaping benefit in Gujarat poll

    Jaishankar said the joint statement dealt with a full set of issues in the Indo-Pacific and under that all "sub-sets" were covered.
    Hurricane Jose twists in Atlantic

    Hurricane Jose twists in Atlantic

    At one point, Jose was a Category 4 hurricane that barely missed the same islands in the Antilles where Irma made a direct hit. The eastern Atlantic has been very active this summer with both Irma and Jose originating in this area of the ocean.
  • Government wiretapped former Trump campaign chairman

    Government wiretapped former Trump campaign chairman

    Manafort was sacked from the campaign months before Election Day, but continued to communicate with Trump into his presidency. Given his top position in the Trump campaign for months, Manafort could be the key to Mr Mueller's investigations.
    Eyes Turn to Difficult-to-Predict Hurricane Jose

    Eyes Turn to Difficult-to-Predict Hurricane Jose

    Still, the cone of uncertainty comes uncomfortably close, within 200 miles of Florida and 50 miles from the Bahamas. Most of the long-term models beyond September 18 have the storm heading out to sea instead of heading west.
    As Hurricane Irma looms, Miami's homeless are urged to go into shelters

    As Hurricane Irma looms, Miami's homeless are urged to go into shelters

    Without the arms and counterbalances, only the cranes' towers would have been left standing, and those are extremely strong, Mr. An employee with the National Weather Service captured the crane boom and counterweight collapse on camera.
  • Maryam Nawaz heads to London

    Maryam Nawaz heads to London

    Meanwhile, PML-N leader Maryam Nawaz Sharif says that the people of NA-120 have rejected the politics of chaos and conspiracies. Mr Sharif has always denied any wrongdoing but the Supreme Court recently dismissed petitions seeking a review of that decision.
    CNN Segment Cut Short After Sports Analyst Repeatedly Says

    CNN Segment Cut Short After Sports Analyst Repeatedly Says "Boobs"

    I'm a First Amendment absolutist and believe in two things completely: the first amendment and boobs , and so... Travis later added that he "triggered" CNN with his views, adding that he says it every day on his own program.
    Frankfurt Motor Show in pictures

    Frankfurt Motor Show in pictures

    The declared aim is for everyone of VW's roughly 300 models to be globally available in an electric version by that date. And only then will electric cars come out of the niche - and achieve relevant market share in years to come.
  • Taco Bell Opening 300 Locations, Ditching Drive-Through, Adding Alcohol

    Taco Bell Opening 300 Locations, Ditching Drive-Through, Adding Alcohol

    Another interesting point: According to Food & Wine, the chain's drive-thrus make up around 55 to 70 percent of its revenue. The new locations will be " cantina style", and are slated for a 2022 opening, according to a report from Food & Wine.

    The biggest Trump burns from the 2017 Emmy Awards

    As of Monday morning, Trump had not weighed in on the show with any tweets. Some of the night's biggest losers included two new Netflix shows.
    Franklin: Win no bigger than others

    Franklin: Win no bigger than others

    Penn State did nothing itself to merit a fall in this week's college polls, but wins by Oklahoma and USC forced a move anyway. Mike Gesicki had 58 yards and two touchdowns while Barkley contributed 54 yards in three catches.