16 Jun 2014
Yellen won’t match Carney surprise yet - RBS
FXStreet (Bali) - Brian Daingerfield and Paul Robson, FX Strategists at RBS, are still not expecting any major hawkish surprise by the FOMC later this week, noting that Yellen won’t match Carney surprise yet.
Key Quotes
"The sudden change in BoE Governor Carney’s tone is a warning for how the market sees the outlook for Fed policy."
"But unlike the Bank of England, which showed an increased concern about rising housing market imbalances, the US Fed is more concerned about the recent stagnation in housing market activity."
"The FOMC meeting is probably too early for a substantial change in Fed language as there’s simply not been enough in the data to warrant such a move. An update to the current guidance is perhaps more likely in September, closer to the timing the Fed expects to complete the taper."
"Indeed, the Fed will very likely have to revise down its 2014 growth forecasts at the June meeting in light of the slow start to the year. Tuesday’s CPI data have taken on added importance, as inflation pressure is the key data point that may push the Fed’s stance."
"So we stay with our higher equities and a lower USD vs. high beta currencies theme. Long AUD/USD."
Key Quotes
"The sudden change in BoE Governor Carney’s tone is a warning for how the market sees the outlook for Fed policy."
"But unlike the Bank of England, which showed an increased concern about rising housing market imbalances, the US Fed is more concerned about the recent stagnation in housing market activity."
"The FOMC meeting is probably too early for a substantial change in Fed language as there’s simply not been enough in the data to warrant such a move. An update to the current guidance is perhaps more likely in September, closer to the timing the Fed expects to complete the taper."
"Indeed, the Fed will very likely have to revise down its 2014 growth forecasts at the June meeting in light of the slow start to the year. Tuesday’s CPI data have taken on added importance, as inflation pressure is the key data point that may push the Fed’s stance."
"So we stay with our higher equities and a lower USD vs. high beta currencies theme. Long AUD/USD."