Market reaction to the FOMC decision is nearly non-existent and it’s not a surprise – the move on rates was not expected and furthermore there is nearly no change in the statement. The only noticeable thing is an “upgrade” of activity assessment from “solid” to “strong” but this is most likely solely due to the strong Q3 GDP number (which was partly inflated by inventories and gov spending as we argued in the FOMC preview).
When we look at certain markets we can see some potentially contradicting tendencies but they are not due to the Fed:
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Open account Try demo Download mobile app Download mobile app- Gold is down another day (but only modestly) as markets lose a bit of interest in the Middle East
- For the same reason OIL is erasing intraday gains
- Tnote is up but this is due to somewhat lower issuance plans
- Stocks are up as the Middle East fears abate (at least for now)
- EURUSD is down on macro differential between US and Europe
Let’s see if Powell conference changes anything. One would expect Powell to stay hawkish to fend off rate cut bets.
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