Today, the results of the final US FOMC meeting will be announced. Inflation continues to be so high worldwide that financial officials in each country are vacantly aware that rising inflation is temporary. FRB Chairman Powell has recently turned to a hawkish stance in parliamentary testimony, and seems to have finally adapted to the realities of the economy. Early termination of bond purchases is likely to be the default route at this meeting.
On the other hand, the timing and pace of rate hikes are still in flux. We are entering a new phase of the spread of Omicron strains, and although lockdown measures have not been introduced in the United States, regulations will be tightened at restaurants and masks will be required to be worn in some states. Although extreme braking is not applied, the situation is such that the strong economic recovery as before cannot be expected. At the moment, CME Fed Watch and others are expected to start raising interest rates from June next year. The number of rate hikes next year will be two or three, and it seems that the view has not been decided.
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The Fed Chairman Powell’s press conference is drawing attention, and the point will be whether or not it will impress the market with hawkishness. The Biden administration has also been reported to be active in combating inflation, and Powell, who was reappointed as chairman under the Democratic Party of Japan, may be indirectly cooperating with the government.
Today, the chairman of the Federal Reserve Board (FRB), Powell, has the most attention at the regular press conference.
The general view of the market is that FRB Chairman Powell will start to make hawkish remarks and head toward a stronger USD, but immediately after that, there is a possibility that the USD that was bought in anticipation of that will be sold. First of all, I want to see the direction without making a decision.
USDJPY tends to be higher ahead of the FOMC. Below is support for the option cut on the 15th and 17th at 113.00. Above, a large sell order is lined up at 114.00, and a large option with a 16-day cut is lined up at 114.25-50, assuming that this is resistance.
EURUSD is on a downward trend. The bottom is supported around 1.1200, and the top is 1.1300 with options for 15/17/16/20/21 cuts, and this is assumed to be resistance.
Currently, the power balance at 15 minutes is
GBP = AUD> USD> EUR> JPY> NZD> CHF> CAD
