October 2014

October 22, 2014 – (ATFX Currency Management) – With the Fed’s October 28-29 meeting right around the corner, we examine the prospects for an end of the U.S. central bank’s Quantitative Easing program and its potential impact on the U.S. dollar.

Here is the FOMC meeting outlook from the research team at ATFX Currency Management.

All you have to do is look at futures bets to gauge where the market feels the Fed is at this point. Bets on a Fed rate hike in October 2015 currently stand at 49 percent, down from 85 percent at the end of September.

Although the Fed’s outlook will be cautious, given the global economic slowdown, there is no reason for the U.S. central bank to stop tapering at this point.

So, the Fed will most likely announce the end of QE altogether with a final $15 billion reduction in the monthly asset purchases, while at the same time stating its usual promise to keep rates near zero for a “considerable time”.

The odds of a dovish Fed are high, but the USD could still get a boost from the end of QE.


USA 

October 3, 2014 (Bureau of Labor Statistics) – Total nonfarm payroll employment increased by 248,000 in September, and the unemployment rate declined to 5.9 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services, retail trade, and health care.

Household Survey Data In September, the unemployment rate declined by 0.2 percentage point to 5.9 percent. The number of unemployed persons decreased by 329,000 to 9.3 million. Over the year, the unemployment rate and the number of unemployed persons were down by 1.3 percentage points and 1.9 million, respectively.

The change in total nonfarm payroll employment for July was revised from +212,000 to +243,000, and the change for August was revised from +142,000 to +180,000. With these revisions, employment gains in July and August combined were 69,000 more than previously reported.

The Employment Situation for October is scheduled to be released on Friday, November 7, 2014, at 8:30 a.m. (EST).

October 2, 2014 (European Central Bank) – At today’s meeting, which was held in Naples, the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.05%, 0.30% and -0.20% respectively.

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. CET today.