Devil in the details


Headlining this week for the US, will be Thursday mornings Fed Funds Rate decision and accompanying statement. So far, the growing consensus has been for the FOMC to make a dovish hint towards future rate policy, and markets have come to expect as many as three rate cuts by the end of 2019. This has been fore fronted by a strong breakout in gold, which usually shows around such themes of lower rate and inflation expectations.


Although there is currently only a 22.5% chance of a cut at this week’s meeting, to say the Fed finds themselves in an undesirable spot is an understatement. Looking back, despite a screaming risk sell-off showing up in Q4, the Fed forecast two hikes in 2019 at their December rate decision, which didn’t seem to help matters. Looking ahead to Thursday, as always, the devil will be in the details.


RBA minutes in focus


The RBA is up for releasing a minute statement of its June monetary policy meeting at 11:30am (AEST) today, leading most investors to the expectation that while latest prints of higher than expected unemployment rate has triggered pessimism surrounding the Australian economy. More importance to the labour market data in the minute statement could drag the AUD/USD pair further south.