· Comments from Fed speakers could see additional focus this week given the dovish rhetoric seen at last week’s press conference, with Yellen, Lockhart, Bullard and George all scheduled to speak.
· Outside of America, Europe sees the German IFO survey release, while markets will also look towards the release of China’s Caixin PMI.
The week ahead does not hold any events quite as anticipated as last week’s FOMC decision, however there is still plenty for market participants to digest. One of the focal points of the week will be the number of Fed speakers; the blackout period means that the FOMC have had to keep their opinions private over the past few weeks and as such market participants will be interested to see individual views on last week’s decision . As a brief reminder, the FOMC meeting last week saw the central bank keep rates on hold, with rhetoric appearing move dovish than expected as Yellen highlighted the domestic labour market and the global economic environment as points of concern . As such, the aftermath saw the USD weaken and T-notes rise, while equities fell despite the lack of a rate hike, with many concerned by the Fed’s view that the economy is not strong enough to withstand a rate hike.
Fed’s Williams (voter, hawk) said that last week’s FOMC decision to keep rates on hold was a close call and that a rate hike this year is most likely appropriate. Williams also added that concerns regarding low inflation was the main cause for delaying the lift-off and that more info on the path of the economy is wanted before hiking rates. (RTRS/Fox)
Fed’s Bullard (non-voter, hawk) expressed concern that the Fed overplayed the recent market volatility in delaying a rate hike last week and added that policy should not be reactive to markets. (RTRS)
Fed’s Lacker (voter, hawk) said that he dissented and views a rate hike as necessary given tightening of labour market and confidence in the Fed reaching their 2% inflation target. (BBG)
While this week’s other speakers include Fed’s Lockhart (Voter, Neutral), who stated last month that the Fed are to being hiking in 2015, however CNY, USD and oil prices complicate the outlook. Elsewhere next week sees scheduled comments from Bullard (Non-Voter, Soft Hawk), who has a tendency to be one of the more outspoken members of the FOMC and George (Non-Voter, Soft Hawk) who, although is considered a Soft Hawk, did highlight last month that recent market volatility is a `complication`. The final Fed speaker of note is Yellen and attention may be paid as to whether her rhetoric remains as dovish as last week , or whether she may choose instead to focus on the fact that every meeting is still on the table, and perhaps give an opportunity for market participants to better gauge the timing of any potential hike.
Greek election results showed that the Syriza and Tsipras are on course for a stronger than expected win and will form a coalition with Independent Greeks who are set to win 10 seats and were already its junior coalition party in the prior government. (BBG/CNBC/Mega TV)
Most notable of the European data points include German IFO data , which may be closely observed considering the German ZEW Survey Expectations (12.1 vs. Exp. 18.3, Prev. 25) missed expectations by a significant margin last week. While finally in Asia, Wednesday sees the release of the Chinese Caixin PMI data (Exp. 47.8, Prev. 47.3), which may see focus from around global markets given the aforementioned comments by Yellen.