Muted market response to stale FOMC Minutes – Scotiabank

By FXStreet FXStreet (Delhi) – Research Team at Scotiabank, notes that the market reaction to minutes to the October 28th FOMC meeting is fairly muted at least so far including in 2 year Treasuries, EURUSD and slightly higher equities.

Key Quotes

“That’s likely because the minutes read like an historical footnote before events transpired to raise market-based probabilities for a hike in December.”

“As argued in our morning note, those events include: the 271k October payrolls report that posted the strongest job growth so far this year and since last December; further evidence of bottoming inflation in the October CPI report; Chair Yellen’s remark that December is a “live possibility”, and resilient markets in the face of the weekend Paris attacks.”

“The minutes frame a discussion that occurred before all of this. They indicate that most FOMC members were not yet confident of the inflation outlook to commence tightening, and that it was “appropriate to wait for additional information to clarify whether the recent deceleration in the pace of progress in the labor market was transitory or reflected more persistent factors…” With November payrolls pending ahead of the December FOMC, such evidence may have been received in October’s strong job gains.”

“Against that backdrop, it was …read more

Source:: FX Street