The results of the US FOMC meeting and the interview with Chairman Powell will be held in the latter half of the NY market. The market up to that point is likely to be a pattern view. The FOMC is expected to leave monetary policy unchanged. The start of a rate hike at the March meeting is consensus, and the market is likely to react to the hawkishness of the statement and the chairman’s press conference.
The market expects a 0.25% rate hike in March. Some have even observed a significant 0.5% rate hike, but at this point it is a fairly minority opinion. Until last year, the number of rate hikes within the year was about three times, but at the moment it is completely assumed to be four times, and some are bullish about five times. If market assumptions seem to be leaning forward, it is possible that dollar buying will be adjusted after Powell’s press conference.
After the market reaction after passing the FOMC has run its course, other themes will emerge until the next March. Will the Omicron strain and its further mutants be talked about? Will the trend of the United States and Russia in response to the tightening situation in Ukraine become a hot topic? Or will the UK and ECB monetary policies in early February be talked about? First of all, it seems that the point will be whether the stock market adjustment movement will settle down after the observation of an early US interest rate hike.
Certainly, there is an atmosphere where market assumptions are quite forward-looking, so if Chair Powell talks calmly, I assume that adjustment USD selling and US stock rebound are the most likely. ..