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15 Mar 2015
Attention shifted to the FOMC outcome - ANZ
FXStreet (Bali) - This week, attention shifts to the outcome of the FOMC’s meeting on Thursday morning NZ time, notes the ANZ Research Team at ANZ.
Key Quotes
"This week, attention should shift across the Atlantic and to the outcome of the FOMC’s meeting on Thursday morning (7:00am NZT). Given the recent strength in the labour market, where the unemployment rate fell to 5.5% in February, we (and it appears the consensus) expect the Fed to alter its forward guidance by dropping its “patience” reference."
"Instead, we expect this to be replaced by perhaps some more state-dependent language, providing the Fed with the flexibility to begin raising rates from around midyear. The exact timing of course is open for debate, with the outlook for core inflation arguably the most important."
"Data on Friday was mixed. The PPI fell sharply (although this was put down to the volatile trade services component), while overall consumer confidence from the University of Michigan survey was down, inflation expectations ticked higher."
"The Fed is likely to acknowledge this inflation outlook uncertainty, keeping their options open. With the RBNZ setting a relatively high hurdle for it to join others in the rate cutting party, likely keeping the NZD elevated on a TWI basis, overall USD performance will be key for NZD/USD direction."
Key Quotes
"This week, attention should shift across the Atlantic and to the outcome of the FOMC’s meeting on Thursday morning (7:00am NZT). Given the recent strength in the labour market, where the unemployment rate fell to 5.5% in February, we (and it appears the consensus) expect the Fed to alter its forward guidance by dropping its “patience” reference."
"Instead, we expect this to be replaced by perhaps some more state-dependent language, providing the Fed with the flexibility to begin raising rates from around midyear. The exact timing of course is open for debate, with the outlook for core inflation arguably the most important."
"Data on Friday was mixed. The PPI fell sharply (although this was put down to the volatile trade services component), while overall consumer confidence from the University of Michigan survey was down, inflation expectations ticked higher."
"The Fed is likely to acknowledge this inflation outlook uncertainty, keeping their options open. With the RBNZ setting a relatively high hurdle for it to join others in the rate cutting party, likely keeping the NZD elevated on a TWI basis, overall USD performance will be key for NZD/USD direction."