Hot Topic – Fed Rate Hike for September?

By | September 13, 2016

Here’s how the markets are responding

• Major global indices are taking a hit following the selloff of US stocks.
• In Asia, the Nikkei fell 1.5%, the Hang Seng dropped 2.5% and the Shanghai SSE is down 1.6%.
• US stocks dropped 2.5% on Friday – the biggest decline we’ve seen since the Brexit referendum.

So what’s got the market shaking like a leaf in Autumn?

• A number of Fed members have actually signaled that a rate hike is on the cards this year and it could happen this month
• While some members’ comments have actually been more dovish about a hike in September, overall the probability of a hike has actually gone up from 18 to 24%
• Most central banks have actually kept their rates unchanged as they take a wait-and-see approach
• The European Central Bank, and both the Banks of Australia and Canada have actually been following this strategy
• On Thursday, the Bank of England is announcing the monetary committee’s decision though after August’s rate cuts, it’s expected to follow match along with the others central banks and keep the status quo.

Other data this week to be aware of:

• On Wednesday we have actually the UK job data report
• As mentioned previously, on Thursday we have actually the Bank of England rate decision and additionally the UK retail sales.
• additionally on Thursday we have actually US retail sales and on Friday the US CPI – both of these figures will certainly be closely watched by US dollar traders as they try to predict the Fed’s next stance.

What do you believe the Fed will certainly do and how will certainly you trade it? Comment below and share your insights.

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