BoJ Interest Rate Expectations
The BoJ will convene to determine future monetary policy next Wednesday and until then there is little in the way of fundamental release that could impact the outlook for the Japanese economy. There is little chance that the central bank will alter interest rates with markets pricing in a 1 bps hike over the next twelve months. To discuss this and trading ideas join the USD/JPY forum
FOMC Interest Rate Expectations
Fed funds futures continue to point toward rates remaining on hold for an extended period of time with a zero percent chance for a hike at the FOMC’s upcoming meeting. Looking out to June, markets are still leaning toward the central bank leaving monetary policy unchanged with only an 18.0% chance of a rate hike. An unexpected gain in February’s advance retail sales gave a small boost to yield expectations but markets will likely hold judgment until the policy decision. Industrial production and housing starts releases will cross the wires before hand and will provide insights into the strength of the recover.
A drop in U.S. consumer confidence offset n unexpected rise in retail sales leaving stocks virtually unchanged on the day. Equity markets have trended higher as there has been enough positive data to promote the notion that the current pace of growth is sustainable. However, signs of tightening from the Fed could limit the outlook for future profits and lead to a sharp reversal. The current triangle formation warns of a potential breakout which should put USD/JPY
’s traders on alert. Discuss this and other fundamental data join the Economics Forum.
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