Today, there are numerous events featuring speeches by US monetary authorities. This comes as we approach the “blackout period,” which begins on Saturday and lasts until the conclusion of the December 13th FOMC meeting. During this blackout period, Federal Reserve officials refrain from making public comments related to monetary policy. Market expectations for this FOMC meeting currently incorporate about a 97% likelihood of the Fed keeping interest rates unchanged. Consequently, the market will be on the lookout for hints regarding the interest rate outlook for the coming year.
Most of the scheduled speech events will occur past midnight Japan time. Participants include Goolsbee, President of the Chicago Federal Reserve Bank, Waller and Bowman, both Federal Reserve Board members, Clarida, Vice Chairman of the Federal Reserve, and Bullard, Acting President of the St. Louis Federal Reserve Bank.
During the previous FOMC meeting in early November, Fed officials dismissed discussions of initiating a rate cut and left the possibility of rate hikes depending on inflation trends. They appeared to have a somewhat hawkish stance. However, since then, economic indicators such as the US employment report and the Consumer Price Index have shown weakness, leading to a trend of USD depreciation in the forex market. How officials interpret the weakening of inflation and employment trends will be of interest. We need to carefully monitor the content of speeches by US monetary authorities to gauge whether the USD depreciation trend will continue in December.
Upcoming economic indicators to be released include the German GfK Consumer Confidence Survey for December, US Home Price Index for September and Q3, US S&P Case-Shiller Home Price Index (20 cities) for September, US Conference Board Consumer Confidence Index for November, and the Richmond Federal Reserve Manufacturing Index for November, among others.
In London time, there will be a speech by Nagel, President of the Deutsche Bundesbank, and the UK’s 30-year bond auction. Later during the New York session, speeches and event participation by figures like Lagarde, President of the European Central Bank, Haskel, a member of the Bank of England, and Lane, Chief Economist of the ECB, are scheduled. Other events include a $39 billion auction of US 7-year bonds and Hewlett Packard’s earnings announcement.
It’s important to note that the speeches by US monetary authorities can be difficult to predict in terms of timing and market impact. However, if they make significant statements, we may consider following their impact. Currently, the market has priced in no rate hike, so any major move would likely be driven by unexpected USD buying triggered by comments from officials.
