Talking Points:
• There is intense market interest in whether the Fed will signal an impending rate hike at its March meet
• The Dollar has adjusted significantly to a hawkish outlook, but the S&P 500 has deferred to complacency
• While risk and Dollar trends are top concerns; trends for Euro, Pound and Kiwi should be watched
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Whether or not you trade the Dollar, the upcoming FOMC rate decision is key event risk. The shift from an accommodative to hawkish monetary policy regime for the world's largest central bank will change the landscape for expected returns and the burden of risk. The Dollar has already rallied eight months on the back of change in policy bearing that contrasts starkly to its major counterparts. That said, this eventuality has led to relatively little speculative adjustment in the capital markets and broader financial system. With risk and Dollar strength at the top of the mind, we shouldn't forget the other themes that are developing behind the market - a revived tension in Greece for the Euro; the discounted UK rate forecast as data approaches; or the New Zealand GDP's impact on the Kiwi. We discuss the heavy event risk ahead of us in today's Trading Video.
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