The Fed gangs up on markets
- The Federal Reserve is ganging up on financial markets, with no fewer than six speakers prepared to deliver opinions for the edification of investors. These include remarks from Yellen, Fischer and Dudley. Most talk on monetary policy (Fischer on exchange rates).
- The point markets need to focus on is what signal will be given for 2016 (we can probably assume the December hike is a done deal). Slow tightening does not mean a glacial pace of tightening, as 2016 is a rising inflation environment and thus risks being a falling real rate environment.
- The Australians are more likely to let the recent tightening of policy stand. Regulatory policy had tightened conditions with the equivalent of a more than 0.25% rate increase. Strong employment data now means this is unlikely to be offset with any monetary policy changes.
- The Euro area has inflation data (showing the fading of the lower oil price from headline and core consumer price measures). We also hear from ECB President Draghi again (expect more vigilance). The Bank of England is offering comments from its Chief Economist.