Tuesday, June 13, 2017

FOMC: Rate Hike on Wednesday?

This week it is presumed that the FOMC will raise the interest rate by 25 basis points for the 2nd time this year, bringing the range to 1.00-1.25%, despite the slow but sure progress of consumption and inflation, something that the FED considers transitory.

What the market is finally interested are the perspectives that the FED proposes until the end of the year: how the fiscal deficit will be handled, whether there will be reductions in inflation and growth expectations (following the ECB's line in Europe last week, although lately I see that both markets no longer converge as they used to do) and above all, the tone of the message (hawkish or dovish). This determines the movement of the SP500 and the commodities.


My favorite stock in those 'FOMC days' is usually the gold /GC (in its 'normal' GLD or 'fast 3X' JNUG variants) and the TLT Treasure Bonds, both shelter elements that traders use when there is indecision in the market, the same the yen, through the etf that follows it, FXY.

In addition to the FOMC meeting, pay attention to the inflation data (CPI) on Wednesday and the Price Index (PPI). Another data in a critical sector these months is Retail Sales.
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