Intraday Market Thoughts

Minutes for Now, Minutes for Later

by Adam Button
Oct 11, 2017 23:37

The FOMC Minutes sent differing signals about the near and long-term. The euro was the top performer while the US dollar lagged. Japanese PPI and Australian home loans data is due up next. Below is the video for our Premium members on existing and upcoming trades.

Former St Louis Fed President Bill Poole once said that markets too often focus on signals about the upcoming FOMC meeting rather than signals that will persist over many meetings.

That's the conundrum after the FOMC Minutes. They had something for everyone. The main headline was that many officials saw another rate hike warranted this year; that's something that's 88% priced in at the December meeting. However, many officials were also concerned that low inflation is not only transitory. So there was a strong signal about one hike but a weak signal beyond. That left the market divided and a whipsaw that ultimately saw the US dollar weaken after an initial burst higher.

Other data Wednesday included JOLTS, which was soft at 6082K compared to 6135K expected. All the metrics ticked lower but the drop was from very healthy levels.

A 4-day barrage of central bank speak starts tomorrow as policy makers gather for the annual IMF/World Bank meetings in Washington, DC. 

Looking ahead, Japan is out with PPI data at 2350 GMT and expected to report on a 3.0% y/y rise. It surely won't be a market mover. A more-sensitive sector is Australian housing and with August home loans due at 0030 GMT, the Aussie could get a bump. The consensus is for a 0.5% m/m rise after a 2.9% jump in July.

Act Exp Prev GMT
Home Loans (m/m)
0.5% 2.9% Oct 12 0:30
JOLTS Job Openings
6.08M 6.13M 6.14M Oct 11 14:00

Latest IMTs