Dollar bullish investors stole the show during trading on Monday with the Dollar Index surging to 11-month highs at 100.00 as expectations intensified during the Federal Reserve raising U.S. interest rates in December.
A senior economic adviser to President-elect Donald Trump stressed economic growth over discussion of Federal Reserve policies on Thursday, citing the need for small-business job growth through better regulation, energy policy and tax cuts.
The U.S. economy will remain in a low interest rate "regime" for perhaps two to three more years, St. Louis Federal Reserve President James Bullard said on Thursday, repeating his call that a single interest rate increase would be adequate for the foreseeable future.
U.S. interest rates futures on Wednesday pared their initial gains linked to Donald Trump's surprise victory for the U.S. presidency, suggesting traders think the Federal Reserve may still raise interest rates at its Dec. 13-14 policy meeting.
The Federal Reserve kept interest rates unchanged on Wednesday in its last policy decision before the U.S. election, but signaled it could hike in December as the economy gathers momentum and inflation picks up.
Against this backdrop, the Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2%. The Committee judges that the case for an increase in the federal funds rate has continued to strengthen but decided, for the time being, to wait for some further evidence of continued progress toward its objectives.
Global stocks were resilient last week Friday with major arenas clawing back gains following the upbeat corporate earnings and stabilising oil prices which revived risk appetite. Asian shares floated into gains on Monday as the improving Japanese trade data propelled the Nikkei +0.29% higher. European markets have already commenced this week on a solid footing by borrowing Asia’s bullish momentum and this could influence Wall Street later today.
In light of the slightly weaker payroll reading for September, while some might be looking forward to the implications for monetary policy, it’s worth asking another question to arrive at the same answer. Considering the 156,000 reading for jobs last month, might the FOMC have regretted raising rates when it had the opportunity to do so three weeks ago? After all, the unemployment rate ticked up a notch to 5% for September.
Asian equities were mixed on Tuesday after Wall Street ended yesterday in red and investors continued to digest news that the UK will begin its official departure from the European Union in March 2017.