Talking Points:
US Dollar Drops as Fed Meeting Minutes Cast Doubt on December Rate Hike
On-Coming Fed-Speak May Encourage Rethink of Imminent “Liftoff” Chances
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The US Dollar underperformed in overnight trade amid continued fallout following the release of minutes from October’s Fed policy meeting. The Australian and New Zealand Dollars outperformed as risk appetite firmed, driving the sentiment-linked currencies upward. The MSCI Asia Pacific regional benchmark stock index rose over 1 percent.
Traders latched on to comments from a dovish minority on the rate-setting FOMC committee that remained dubious about the likelihood of a December rate hike. That seemed to inspire hopes that liftoff may yet be delayed. This was presumably seen as supportive as markets continue to fear stimulus withdrawal at a time when overall global growth is slowing.
S&P 500 futures are pointing firmly higher in late Asian trade, hinting the risk-on mood is poised to carry forward. The move may swiftly fizzle however as cooler heads prevail over knee-jerk optimism. The Minutes document showed that almost all Fed officials agreed on a need to assess labor market strength. That seemed to set the stage for what was needed to cement rate hike chances. The subsequent 271k surge in nonfarm payrolls may have delivered precisely what Janet Yellen and company were looking for.
Scheduled commentary from Atlanta Fed President Dennis Lockhart and Fed Vice Chair Stanley Fischer – both of whom seemingly lean toward December liftoff based on recent commentary – may drive this point home in the hours ahead. That could trigger a swift reversal in the greenback’s fortunes, reversing overnight losses.
Losing Money Trading Forex? This Might Be Why.
Asia Session
GMT
CCY
EVENT
ACT
EXP
PREV
21:00
NZD
ANZ Job Advertisements (MoM) (OCT)
1.2%
–
2.3%
21:45
NZD
PPI Input (QoQ) (3Q)
1.6%
–
-0.3%
21:45
NZD
PPI Output (QoQ) (3Q)
1.3%
–
-0.2%
23:50
JPY
Trade Balance (¥) (OCT)
111.5B
-246.3B
-115.8B
23:50
JPY
Trade Balance Adjusted (¥) (OCT)
-202.3B
-343.1B
-309.8B
23:50
JPY
Exports (YoY) (OCT)
-2.1%
-2.0%
0.5%
23:50
JPY
Imports (YoY) (OCT)
-13.4%
-8.6%
-11.0%
00:30
AUD
RBA FX Transactions Government (OCT)
-579M
–
-785M
00:30
AUD
RBA FX Transactions Market (OCT)
516M
–
712M
00:30
AUD
RBA FX Transactions Other (OCT)
83M
–
89M
01:45
CNY
MNI Business Indicator (NOV)
49.9
–
55.6
03:17
JPY
BOJ Annual Rise in Monetary Base
¥80T
¥80T
¥80T
04:30
JPY
All Industry Activity Index (MoM) (SEP)
-0.2%
0.2%
-0.1%
05:30
JPY
Nationwide Dept Sales (YoY) (OCT)
4.2%
–
1.8%
05:30
JPY
Tokyo Dept Store Sales (YoY) (OCT)
7.4%
–
4.9%
06:00
JPY
Machine Tool Orders (YoY) (OCT F)
-22.9%
–
-23.1%
06:30
JPY
BOJ’s Kuroda Gives Press Conference
–
–
–
European Session
GMT
CCY
EVENT
EXP
PREV
IMPACT
07:00
CHF
Trade Balance (OCT)
–
3.05B
Medium
07:00
CHF
Exports Real (MoM) (OCT)
–
0.2%
Low
07:00
CHF
Imports Real (MoM) (OCT)
–
2.6%
Low
08:00
EUR
ECB’s Coeure Speaks in Frankfurt
–
–
Medium
08:30
EUR
ECB’s Praet Speaks at Europe Finance Week
–
–
Medium
09:00
EUR
ECB Current Account SA (SEP)
–
17.7B
Low
09:00
EUR
ECB Current Account NSA (SEP)
–
13.7B
Low
09:30
GBP
Retail Sales Ex Auto Fuel (MoM) (OCT)
-0.6%
1.7%
Medium
09:30
GBP
Retail Sales Ex Auto Fuel (YoY) (OCT)
3.9%
5.9%
Medium
09:30
GBP
Retail Sales Inc Auto Fuel (MoM) (OCT)
-0.5%
1.9%
Low
09:30
GBP
Retail Sales Inc Auto Fuel (YoY) (OCT)
4.5%
6.5%
Low
11:00
GBP
CBI Trends Total Orders (NOV)
-10
-18
Low
11:00
GBP
CBI Trends Selling Prices (NOV)
-6
-7
Low
12:30
EUR
ECB Account of Monetary Policy Meeting
–
–
Medium
Critical Levels
CCY
Supp 3
Supp 2
Supp 1
Pivot Point
Res 1
Res 2
Res 3
EURUSD
1.0506
1.0581
1.0621
1.0656
1.0696
1.0731
1.0806
GBPUSD
1.5103
1.5164
1.5200
1.5225
1.5261
1.5286
1.5347
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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