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June 13, 2018

IronFX, Daily Report: All eyes on the FOMC & Further stabilization on Korean peninsula ahead

What’s happening in the market today? Check out today’s market highlights!

This article is originally referred from IronFX News.

Further stabilization on Korean peninsula ahead

  • The Kim-Trump meeting was completed yesterday with both parties signing a joint document.
  • According to media, the joint document included “security guarantees” for N.Korea from the US president and the US may stop joint military exercises with S. Korea.
  • On the other hand, N. Korea pledged unwavering commitment to the denuclearization of the Korean peninsula among other points.
  • Sanctions against N.Korea are to remain in place and the denuclearization process is to start “very,very quickly “ as per Pres. Trump.
  • Should there be further positive headlines about the issue we could see the USD strengthening while safe havens could weaken.

All eyes on the FOMC

  • The FOMC is going to announce it’s interest rate decision today at 18:00 (GMT) and is widely expected to hike rates by 25 basis points reaching +2.00% and Fed’s Funds Futures imply a probability for the FOMC to hike rates by 87%.
  • Hence, market focus could shift to the accompanying statement and the dot plot for further clues about future rate hikes.
  • We see the case for the bank to have a neutral to hawkish accompanying statement as the US economy had favorable financial releases recently.
  • Also, should the Fed’s forecasts alter, based on the recent acceleration of the inflation rate and the favorable employment report, we could see the dot plot implying a four rate hike path in 2018.
  • Overall, the greenback could strengthen from the interest rate decision and the following press conference.

Today’s other economic highlights

  1. UK: Core CPI rate for May, Survey: +2.1% yoy Prior: +2.1% yoy, 08:30 (GMT), could weaken GBP
  2. UK: CPI rate for May, Survey: +2.5% yoy Prior: +2.4% yoy, 08:30 (GMT), could support GBP
  3. UK: PPI input prices for May, Survey: +1.6% mom Prior: +0.4% mom, 08:30 (GMT), could support GBP
  4. Eurozone: Industrial Production for April, Survey: -0.5% mom Prior: +0.5% mom, 09:00 (GMT), could weaken EUR
  5. US: PPI for May, Survey: +0.3% mom Prior: +0.1% mom, 12:30 (GMT), could strengthen USD
  6. US: EIA Weekly Crude Oil Stocks, Survey: -2.744m Prior: +2.072m, 14:00 (GMT), Could support Oil Prices

Original Source: IronFX News

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