\Fed Has To Hike In December
Tip TV | Sep 24, 2015 13:44
Nick Batsford, CEO of Tip TV, was alongside Zak Mir, technical analyst for ShareProphets.com, and Bill Hubard, Chief Economist for Bullion Capital, when he opened the Tip TV Finance Show on the 24th September 2015 to discuss the outlook for a Fed hike, the Volkswagen (XETRA:VOWG) emissions scandal, as well as Japan.
Hubard outlined the need for the Fed to hike rates in December in order to decrease the uncertainty in markets. He expects Yellen to make the Federal Reserve’s policy clearer, and saying that if global events change, the Fed’s monetary policy can change. Mir noted that after the Fed didn’t hike interest rates in the US, he was surprised that the markets didn’t really crash. On the other hand, Hubard commented that the SA Rand is close to all-time lows, and the CAD is at 11 year lows, and highlighted that even though Yellen didn’t move on rates, emerging market currencies are still worsening despite all the fears about a hike causing EM currencies to suffer.
h3 Trade war on the cards?/h3Concerning the Volkswagen (LONDON:0P6N) emissions scandal, Mir highlighted the lack of communication between the regulators and VW over the impractical level of emissions for the diesel cars they produce. He added that the battle between the US and German car makers will continue and a possible trade war is possible.
h3 Japanese stock market traders sold main index shares to a new low/h3Batsford commented on Japan, and outlined that after a 3 day holiday coinciding with the autumn equinox, Japanese traders sold shares in the main index taking it to a new low for the year – below the August slump. He continued that September’s PMI dipped to 50.9 from 51.7 and July’s All Industry Activity Index shrank to 9.6 from 9.9 a month earlier. Mir noted that when the USDJPY comes down, the Nikkei often comes down with it.
h3 CME Fed watch states very low probability of rate hike in 2015/h3Batsford highlighted FX Street, who believes that the Fed hike rate probability is more sensitive to stock prices post the dovish Fed decision, and outlines that the FOMC meeting on the 28th of October on Monday was 13.8%, but after Monday it is 11.5%. Meanwhile, the probability of a hike on Monday for a December 15th hike was 43.8%, but after Monday the chances for a rise on the same date is 35.5%.
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