Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

FOMC Leaves Rates Unchanged

Published 01/02/2018, 10:04 am
Updated 09/07/2023, 08:32 pm
XAU/USD
-
US500
-
AXJO
-
GC
-

Originally published by Rivkin Securities

US stocks recovered after two days of declines but early gains were slowly whittled away during the rest of the trading session. A small boost in the last hour of the trading session prevented the two major indices from closing lower although the S&P 500 was barely up. S&P/ASX 200 futures are down three points this morning.

US bond yields remained high overnight while Australian bond yields fell following slightly weaker than expected CPI data that was released yesterday. The quarterly CPI rose 0.6% compared to expectations of 0.7% and the market obviously interpreted this as reducing the likelihood of a rate hike in the near future. The Australian and US ten-year bond yield spread is now just 10 basis points and risks going negative for the first time since 1998.

Janet Yellen had her last FOMC meeting early this morning (AEDT) at which the committee decided to leave rates unchanged, as widely expected. Nevertheless, the commentary suggests that further gradual increases in rates are warranted with inflation to stabilise at around 2% in the medium term. The CME Fedwatch tool now predicts a greater than 83% probability of a rate hike at the next FOMC meeting in March at which new Fed President Jerome Powell will preside. The reaction to the FOMC in gold was somewhat unpredictable as the price initially spiked around $6 lower before quickly recovering and closing the day higher at $1,345.

Data Releases:

- Australia Building Approvals 11:30 am AEDT

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.