img CDN
img AUS
img NZ
img US
Call us now: 1.844.363.7297
imgOnline Dealing Login

Market Endures the Calm Before the Storm

Published December 14, 2016
  • Markets are in a stasis as investors wait for the Federal Reserve and Janet Yellen to hike rates and offer the official verdict on the interest rate cycle for 2017
  • Going into today's Fed decision, the Canadian Dollar is among the best performing G10 currencies
  • While market-implied probabilities put the chances of an increase at 100 percent, they also imply an 8 percent possibility of a 50 basis-point increase
  • The Fed will be careful in fueling any hawkish expectations and Yellen will reinforce a patient stance in highlighting the scope for further reduction in labour market slack and the downside risks to USD strengthening
  • As the markets wait for the Fed, the policy sensitive 2-year Treasury yield rose to 1.17% yesterday, the highest in more than six years; the 10-year yield eased to 2.48%, which marked the highest level since June 2015
  • Wholesale prices in the U.S. rose from a year earlier by the most since 2014 as food costs and retail margins increased, helping bring inflation closer to the Federal Reserve’s goal
  • Global stocks are mostly down as the DAX, FTSE and France’s CAC 40 showed lower numbers; Dow, S&P, and Nasdaq futures are also all marginally down
  • Oil prices are down after the American Petroleum Institute (API) announced U.S. crude oil inventories unexpectedly rose by 4.7 million barrels last week
  • Prices came under more pressure after the International Energy Agency said that OPEC members pumped oil at record levels in November, which could potentially offset the effects of a planned production cut
  • OPEC also did not give a detailed forecast of the outlook for oil production if all OPEC members cut supply as promised; they did, however, admit that total production from last month is 1.37 million barrels per day over next year’s pledged target
  • On the biggest day of the year, it’s definitely best to be prepare as best as you can!

Charts: (1) % USD Over Valued Vs Traded Weighted USD (2) Market Sentiment Survey Going into Fed Decision