Entering US session, Euro is trading as the strongest one today. European Commission finally agreed with Italy on its 2019 budget, thus the so called “Excessive Deficit Procedure”. Italian 10 year yield tumble to as low as 2.778. German-Italian spread also narrowed to 253. Swiss Franc is, as a result of relief rally in European stocks too, trading as the weakest one for today. Dollar is the second weakest as markets await FOMC rate decision.
In short, Fed is widely expected to raise federal funds rate by 25bps to 2.25-2.50% today. The question is on the rate path in 2019 after all the political pressures Fed policymakers faced. The new economic projections will provide the key guidance to market expectations. More on the projections here.
Also, here are some suggested readings on FOMC:
- Fed Likely Hikes Rate in December, Future Path More Dovish
- S&P 500: Dovish Fed Hike Enough to Support US Stocks?
- Four Fed Scenarios And One Market
- Trade The Fed Decision
- USD/JPY: Will The Fed Deliver A Present Or A Lump Of Coal For Buck Bulls?
- Will the Fed be Less Dovish than Markets Expect?
- FOMC Preview: What Do We Expect?
- What To Expect From The Last Fed Meeting In 2018?
In European markets, at the time of writing:
- FTSE is up 1.00%
- DAX is up 0.73%
- CAC is up 0.72%
- German 10 year yield is down -0.004 at 0.243
- Italian 10 year yield is down -0.169 at 2.778
Earlier in Asia:
- Nikkei dropped -0.60%
- Hong Kong HSI rose 0.20%
- China Shanghai SSE dropped -1.05%
- Singapore Strait Times rose 0.43%
- Japan 10 year JGB yield rose 0.0048 to 0.033
