Another respected bank giving a thumbs-down to a US rate hike today
Latest client note from Credit Agricole courtesy of our friends at efxnews.com again
Today's key release is the October FOMC statement. Nevertheless, we think this will pass as non-event so markets more likely to focus on data releases. This reflects a general view that the chances of a rate hike this week are remote.
What's more, there is no presser or forecast updates, leaving market participants to focus on the statement. This month's statement is unlikely to provide much clarity about the outlook for the FOMC policy rate so markets are left clinging to data releases for signals about the state of the economy. Despite the limited clarity on the Fed outlook, our focus persists on the strength of the domestic economy.
As such we stay of the view that the central bank is likely to tighten monetary policy in December.
As consensus expectations seem to favour a March lift-off such an outcome suggests room of rising Fed rate expectations to the benefit of the USD
I repeat my long-held view that no rate hikes are forthcoming from the US or UK as global uncertainty and economic slowdown make their impact on each central bank's hike aspirations
