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7 Jan 2015
Today’s FOMC meet might have a hawkish tone – KBC
FXStreet (Barcelona) - The KBC Bank Research Team feel that today’s FOMC Minutes might be modestly hawkish and provide some information regarding why the fed changed its forward guidance.
Key Quotes
“Today’s main item on the eco calendar are the FOMC Minutes. They will provide us with more insight on why the Fed changed its forward guidance and perhaps some more info on the start of the tightening cycle.”
“Overall, we expect a modestly hawkish tone, which would clash with current market sentiment (flight to safety; US yields reaching new cyclical lows at the longer end of the curve).”
“We still anticipate a first rate hike in the Summer, which should eventually (on the back of more eco data strength?!) weigh on US Treasuries with an underperformance of the 2-yr/5-yr sector.”
“Ahead of the Minutes, the ADP report will be released. We see risks on the downside of expectations, but expect a muted impact ahead of the Minutes.”
Key Quotes
“Today’s main item on the eco calendar are the FOMC Minutes. They will provide us with more insight on why the Fed changed its forward guidance and perhaps some more info on the start of the tightening cycle.”
“Overall, we expect a modestly hawkish tone, which would clash with current market sentiment (flight to safety; US yields reaching new cyclical lows at the longer end of the curve).”
“We still anticipate a first rate hike in the Summer, which should eventually (on the back of more eco data strength?!) weigh on US Treasuries with an underperformance of the 2-yr/5-yr sector.”
“Ahead of the Minutes, the ADP report will be released. We see risks on the downside of expectations, but expect a muted impact ahead of the Minutes.”