The FOMC minutes confirmed that the Fed is on track to hike rates again at the December meeting, what else will appear as major market movers today? Let’s find out with this 12 October Market moving fundamental events analysis from HotForex.
12 October, HotForex – Asian stock markets are broadly higher, following on from gains on Wall Street yesterday, but UK100 and U.S. futures are heading south. Mixed signals there for European markets. The FOMC minutes confirmed that the Fed is on track to hike rates again at the December meeting.
European Market Outlook
The BoE remains headed for a rate hike and the ECB is pretty much set to reduce asset purchases from early next year even if officials remain split on the size of the reduction and whether there should already be a signal that this is the beginning of the end for QE.
Brexit talks remain in focus ahead of the crucial EU summit where officials will decide whether sufficient progress has been made for trade talks to begin this year.
Meanwhile, Spain’s hard line stance on Catalonia and signs that the front in Barcelona is cracking has helped peripheral bond yields to drop sharply yesterday and it remains to be seen whether the gains in bonds can be held. With the data calendar relatively quiet again, politics and central bank speeches will remain in focus. The Eurozone has industrial production for August and there are inflation numbers out of France and Sweden.
FOMC minutes Overview
FOMC minutes showed “many” saw another rate hike was warranted, while a smaller number (probably Kashkari, Evans, and Kaplan) thought action could wait. Several thought that further tightening should hinge on incoming data, though it was acknowledged that Hurricanes Harvey, Irma, and Maria would impact economic activity.
There was active debate over inflation and wages. While many saw some of the softening in inflation as due to idiosyncratic factors, other factors could be at work too and there was concern that such influences could be more persistent. Also, “several expressed concern that the persistence of low rates of inflation might imply that the underlying trend was running below 2%.”
Main Macro 12 October Market moving fundamental events analysis
- EU Industrial Production – Expectations – 0.5% m/m from 0.1% seen in August.
- US Jobless Claims & PPI – Expectations – September PPI is forecast to rise 0.4% vs 0.2% in August, while rising 0.2% core and 2.1% core y/y. Also due then is recently choppy initial jobless claims, seen dropping another 22k to 238k as storm anomalies wash out of the data.
- ECB speeches – ECB President Draghi and ECB’s Praet speak in Washington and New York respectively.
- FOMC Speeches – Governor Powell addresses “Prospects for Emerging Market Economies in a Normalizing Global Economy” from 10:30 ET and Governor Brainard takes part in a monetary policy panel at the Peterson Institute from 10:30 ET.
Support and Resistance levels
This article about 12 October Market moving fundamental events was written by Andria Pichidi, Market Analyst at HotForex. The provided article is a general marketing communication for information purposes only. It does not constitute an independent investment research. Nothing in this communication contains an investment advice or an investment recommendation. It also does not contain a solicitation for the purpose of buying or selling of any financial instrument.
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