Fed Aftermath; Norway hikes; BOE keeps rates steady

The dollar got pummeled, Treasuries continued to surge higher, gold skyrocketed as the Fed aftermath was accompanied by an escalation in the Middle East.  The biggest event of the month will likely be the Fed’s signal that most members are reading to begin an easing cycle.  Powell’s press conference showed some reluctance, but it seems markets are certain the Fed will cut in July.  If data deterioration is worst than expected, calls for a 50-basis cut at the July meeting will grow in the coming weeks. 

BOE

The Bank of England kept rates steady in a unanimous vote, surprising some who expected Haldane and Saunders to follow through on their recent hawkish comments.  The BOE mentioned that the market is not agreeing with their Brexit assumption view.  No-deal risks are rising and since the BOE was expecting a smooth Brexit, we will likely see a long pause on a rate hike from the BOE.  The bank cut their Q2 outlook from 0.2% to 0.0%. 

Norges

Norway’s central bank delivered a rate hike as the rest of the advanced economies are contemplating easing or unleashing fresh stimulus into their domestic markets.  The Norwegian economy has performed well and with recent upgrades to their forecasts, more hikes could be coming this year.  Markets were expecting this to be the last hike, so we could see the Norwegian krone deliver further gains.  

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Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya