Technical Analysis

Federal Open Market Committee (FOMC) November meeting minutes due Wednesday, 23 November

This preview (in summary) is via Scotia

Recall that the Fed disappointed those who had thought it might deliver a policy pivot at that meeting.

Watch for three things:

  1. discussion that bolsters Powell’s guidance that the terminal rate estimates are likely to be revised higher in December’s ‘dot plot’ compared to September and the range of opinions around the issue using the Fed’s frequency of citations language (one, a couple, a few, some, several, many, most, all etc).
  2. Also watch for the frequency of opinions around timing the downshifting in the pace of rate hikes after Powell said “that timing is coming and it may come as soon as the next meeting or the one after it.” Markets are priced for a downshift to 50bps in December and could be vulnerable to any indications that the FOMC is still considering a larger move.
  3. Finally, expect further rejection of pausing the tightening stance given Powell’s guidance that is “very premature.”

Still, the minutes are at risk of being stale which is often the case when they’re released on a rigid schedule three weeks later. Nonfarm payrolls and wage growth arrived after the meeting and were constructive, while October’s core CPI decelerated to 0.3% m/m which FOMC members have since downplayed as something they don’t wish to overreact toward given prior head fakes.

Due at 1900 GMT:

This snapshot from the ForexLive economic data calendar, access it here.

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