Walks with front loader

“We are less convinced of the underlying force in both the demand and labor markets, so remain skeptical whether they will continue with their full walking program,” wrote Steven Englander, head of G-10 foreign exchange research at Standard Chartered Plc., in a Note. “The Fed could use upcoming meetings to preload increases while such moves are politically and publicly popular.”

Buy Treasuries

“The attractiveness for medium and long-term government bonds is high,” said Makoto Noji, chief strategist for currencies and foreign bonds at SMBC Nikko Securities Inc. resilient to the extent that the Fed can complete all planned rate hikes.”

Euro bid

“The aggressive Fed is opening the door to a more aggressive ECB iteration and as we have seen in previous episodes where the markets are pricing out negative interest rate policies, the euro is soaring,” said Stephen Innes, managing partner at SPI Asset Management. “And as ceasefires have become more and more popular, especially in the energy market, I think EUR/USD could hold a bid. Lower energy prices are good for the EU economy, hence the euro.”


This post Warnings Abound in Market Circles as Fed Error Betting Grows was original published at “https://www.bloombergquint.com/onweb/alarm-bells-ring-in-markets-with-fed-error-bets-seen-rising”

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