Let’s Wait and See…
After the excitement of the last couple of weeks, the US took centre stage yesterday and it was their turn to shock the markets. Except they didn’t. The Fed statement was something of a damp squib as it was very much a “let’s wait and see” rhetoric that was released. Whilst the Dollar remains the only horse in the rate hike race, there certainly appears to be no rush on their side. They are urging patience, which one could take to mean that it’s not going to happen until June at the earliest.
There was recognition of the downward trend in inflation although this is expected to be short-term and an improved job market. The Fed also mentioned international developments and the impact that they have on future decisions. Today we will see jobless claims from the US which are expected to decline again.
In the Southern hemisphere, the Reserve Bank of New Zealand kept their interest rate at 3.5% and in their statement commented on how they expect this level to kept on hold for some time, economic data depending. In Australia, we have seen the AUstralian Dollar weaken over the past few days on rumours of an imminent rate cut. However, it appears stronger than expected core inflation figures have quashed these rumours.
Major news out today includes unemployment data from Germany, consumer confidence from the Eurozone and jobless claims and home sales from the US.