Talking Points:
• The FOMC minutes added to the swell in Fed rate speculation fed by the October policy decision and NFPs
• Despite a higher probability of a December hike, the USDollar pulled back and S&P 500 crossed the 200-day MA
• Risk trends and Fed timing will find more discrete counterparts in key event risk ahead
See how retail traders are positioning in the majors in your charts using the FXCM SSI snapshot.
With a slip from the Dollar and charge by the S&P 500 back above the 200-day moving average, it would seem that this past sessions top event risk (the FOMC minutes) curbed the chances of a December Fed hike. Yet, the transcript reinforced the probability. The seemingly contradictory response is a reflection of a fundamental scenario that has been progressively adjusted to in the financial markets. A Fed tightening still carries serious potential volatility and capital redistribution risk as its implications are incredibly complex, but for now the speculative edge has dulled. The question is how strong the move against these prevailing trend can be. The Dollar is just off 12 year highs. Meanwhile, risk-honed assets like US equities have other hurdles to account for. Ahead, the docket will offer further event risk to shape key risks to sentiment and important monetary policy forecasts. We look at trends and catalysts in today's Trading Video.
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