Fed not priced to drop ‘patient’ language

March 17, 2015 09:55 AM

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Treasuries and Eurodollars are higher this morning following a weaker housing number, though the permits were indicative of some forthcoming progress. Futures started strong immediately following the opening last night.

Trade on Monday was on light volume and mixed open interest results. Treasuries found a 16.000 decline in open interest, but the 164,000 decline in Eurodollars was on the back of 153,000 lost with March 2015 Eurodollar contracts expiry. Otherwise, another ho-hum bid that has been the repeat since the close from the last employment report.

Wednesday's widely anticipated FOMC statement, SEP and post-meeting press conference is upon us and at this point it is hard to imagine too many who are short and without deep pockets to withstand the upward pressure that has been exerted over the last 7 sessions. The base line expectations for FOMC are as follows:

· Fed drops 'patience'
· Fed lowers unemployment expectations
· Fed reduces recent growth assessment
· Fed emphasizes data dependency
· Fed lowers year-end ‘dot-plot’ for 2015

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About the Author

Martin McGuire, managing director at TJM Institutional Services