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US Markets Steady Ahead of FOMC Minutes Release

Further Clarity of US Interest Rates Unlikely

US equity markets are expected to open relatively flat, a day after having made fresh record highs once again, as traders await the release of the FOMC minutes from the September meeting.

The dollar is also steady ahead of the release of the minutes later on in the day, with traders seeking further clarity on interest rates going forward. The Fed surprised traders last month when it projected one more rate hike this year and three next, despite the fact that inflation has not recovered as expected despite the apparent tightness in the labour market. Still, policy makers since the meeting haven’t given the impression that they are particularly confident when it comes to these interest rate projections which is creating doubt around them.

Catalonia Relief Supports Equities and EUR [1]

I’m not convinced the minutes will provide much additional detail on interest rates and will instead simply reiterate what we learned in the statement, economic projections and press conference with Chair Janet Yellen. Moreover, with vice Chair Stanley Fischer having now left the FOMC and Yellen’s tenure as Chair expiring in February, we have to question just how useful they could be in anticipating the Fed’s moves next year. A December rate hike now appears very likely – and is 98.6% priced in according to CME Group – but beyond that, a significant amount of uncertainty remains.


Source – CME Group FedWatch Tool [3]

Rajoy Requests Clarity on Catalan Independence Declaration

Relations between Catalonia and Madrid are showing no signs of improvement after Spanish Prime Minister Mariano Rajoy responded to Carles Puigdemont’s request for talks by releasing a statement formally asking whether independence had been declared or not. Clearly talks is not on the agenda for the Spanish government, with Rajoy claiming that a declaration of independence is needed before any other measure can be taken under article 155 of the constitution.

OPEC Comments Uncap Oil’s Wellhead [4]

With a peaceful resolution clearly not on the table it seems Puigdemont’s options now are limited and these comments will only fuel the desire for independence to be officially declared, after which the situation will likely deteriorate rapidly. Still, the IBEX has given away very little of its early session gains and remains around 1.5% up on the day while the euro is behaving like nothing has happened, although this has broadly been the case throughout the entire process.

Economic Calendar


For a look at all of today’s economic events, check out our economic calendar [6].


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam [11]

Senior Market Analyst, UK & EMEA at OANDA [12]
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

Latest posts by Craig Erlam (see all [11])