Candidate Trump loved a strong dollar, said the Fed's low interest created inequality and a false economy and hinted Janet Yellen needed to go. Now that he’s the president, he loves all three and wants them to stay.
The key economic releases this week are the durable goods report on Thursday and Q1 GDP on Friday. It iweek is the busiest week of earnings season, with 40% of S&P 500 equity cap reporting. In addition, there are a few scheduled speaking engagements by Fed officials this week.
Something strange happened during yesterday's London PM fix: as spot gold was soaring, the London gold price benchmark waterfalled lower before fixed some $12 below the spot price on Tuesday afternoon as "the auction appeared to become locked in a downward spiral",
During the so-called Chinese Banking Liquidity Crisis of 2013, the relative cost of funds for non-bank institutions spiked to 100bps. So, the fact that the 'shadow banking' liquidity premium has exploded to almost 250 points - by far a record - in the last few days should indicate just how stressed Chinese money markets are.
The near-record string of 10 consecutive Dow Industrials record highs, a streak not seen since early 1987, may be about to end if futures, which are currently trading -0.3% lower, fail to stage a rebound.
In an unexpected announcement, India’s central bank left borrowing costs unchanged for a second straight meeting, shifting its policy stance to neutral from accommodative, effectively signaling an end to easing cycle.
"All of this is being done just to stop a few people shorting the currency to reflect the fact that everyone can see that capital is flowing out and that fundamentals argue for a weaker yuan" - Rabobank
It was a night of painful fireworks for China bears, who experienced the overnight offshore Yuan deposit hitting a record 80%, while the USDCNH tumbled as low as 6.78, resulting in a 2.3% move in 2-days: the biggest such jump in the CNH on record.
It will probably not come as a big surprise that the head of Deutsche Bank’s global anti-financial crime unit, a post also known as the bank's top "crime fighter", plans to leave that position after just six months at the bank.
Following last night's trial ballon by the PBOC, when the PBOC hinted it was studying possible scenarios of capital outflows and is preparing contingency plans, the Offshore Yuan reacted accordingly, and soared by 0.9% to as high as 6.8950 per dollar as of 7:20pm in Hong Kong. That was the biggest increase on a closing basis since Jan. 11 last year.
When it comes to today's Fed decision, there is little doubt: a 25 bps rate hike, the first in 2016 and only the second since the financial crisis, is now assured: all 103 Bloomberg-surveyed economists expect a 25bp increase, and the market agrees pricing in a 100% probability of a rate hike. So what does matter? Here is a selection of sellside opinions, summarizing they key things to watch for in today's FOMC statement.