Archived IMT (2010.07.14)

FOMC MINUTES INDICATE A FED DOWNGRADE of the the US econ outlook for 2010 and 2011, weighing on yields and stocks, while keeping USD mixed. FOMC revised down its 2010 and 2011 projections for GDP growth and inflation while pushing up its unemployment outlook from the April forecasts; GDP down to 3.0%-3.5% from 3.2%-3.7%, unemployment to 9.2%-9.5% from 9.1%-9.5% and Core PCE price index to 1.0%-1.1% from 1.2%-1.5%. GBP continues to outperform CAD due to robust UK employment figures and negative impact on CAD from FOMC revisions. GBPCAD eyes 1.5850 and 1.5910. JPY PAIRS may drift further in event of deteriorating US equities. Keep an eye on Chinese Q2 GDP tonight, expected around 10.5% from 11.9% in Q1. Chinese are unlikely to show a figure that is too strong in order to avoid the ire of the West about raising yuan flexibility.

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