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Markets Brace for Central Bank Week | Empire State Business Conditions Index Turns Negative

Published June 17, 2019
  • The New York Federal Reserve’s Empire State business conditions index declined in June, tumbling into a negative read for the first time in more than two years. Headline general business conditions index plummeted by twenty-six points, the largest monthly decline on record to -8.6. New orders retreated while shipments increased modestly.
  • Market participants are approaching Wednesday’s FOMC meeting with caution as the meeting will set a tone for near to medium term market outlook. Positioning has moved dramatically towards a dovish outlook from the Federal Reserve as Friday’s consumer data has given markets pause.
  • This morning, public hearings begin in Washington on President Trump’s proposed tariffs on $300 billion more in Chinese goods. As the US-China trade dispute rages on, US Commerce Secretary Wilbur Ross repeated over the weekend that the base case for the G20 Summit is “an agreement to actively resume talks”.
  • Markets are expecting the Bank of Japan to expand its stimulus in its next move, as the strengthening of the yen from prospective US Federal Reserve rate cuts is seen as a key factor for triggering these actions. Economists predict the yen would strengthen to ¥105.00 against the greenback if the Fed starts lowering rates.