Trading strategy for today
Updated
The Fed is likely to signal plans to cut rates in September when it concludes its meeting on Wednesday, according to economists surveyed by Bloomberg News, a move they see as leading to quarterly rate cuts through 2025. Rate markets are pricing in a 100% September move, with the possibility of two more cuts by year-end, according to swaps data compiled by Bloomberg.
“While the July FOMC meeting may be too early to start cutting rates, it is not too early to start preparing for a September cut,” Stephen Gallagher, an economist at Societe Generale, wrote in a note to clients.
Hours before the Fed’s decision, the BoJ is expected to detail its plans to reduce bond purchases this month at the conclusion of its two-day policy meeting on Wednesday, while most economists also see a chance of a rate hike. USDJPY fell 2.4% last week as traders priced in more than a two-thirds chance of a 10-bps rate hike, triggering a selloff in risk-sensitive developed and emerging market currencies and sending the Nikkei 225 into a technical correction.
“While the July FOMC meeting may be too early to start cutting rates, it is not too early to start preparing for a September cut,” Stephen Gallagher, an economist at Societe Generale, wrote in a note to clients.
Hours before the Fed’s decision, the BoJ is expected to detail its plans to reduce bond purchases this month at the conclusion of its two-day policy meeting on Wednesday, while most economists also see a chance of a rate hike. USDJPY fell 2.4% last week as traders priced in more than a two-thirds chance of a 10-bps rate hike, triggering a selloff in risk-sensitive developed and emerging market currencies and sending the Nikkei 225 into a technical correction.
Comment
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Comment
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