This might just be the start of pre-Fed positioning
As Europe gradually grinds to a close we may have just seen some pre-FOMC positioning over the London fix as traders square up for the risk event tomorrow. It's something we need to be aware of between now and the FOMC tomorrow.
The expectations are through the roof and with so much of the market leaning one way there's going to be plenty of choppy trading to come. There will be traders who are going to sit steadfast in their positions into the Fed, there will be those who are in good positions but will start to feel a little nervous and might take some off, there will be some who's bums will start flapping and they'll bail rather than keep the risk on and there will be the latecomers who were waiting for a big dip that never came, and who won't want to miss the party.
Expect pretty much the same as today but always with the possibility of seeing some sudden 20-30+ pips moves out of the blue as the Fed positioning adjustments get made. By and large we shouldn't see any of the intraday ranges broken to any great degree, unless we see some big profit taking or large last minute bandwagon jumping.
Buckle up for another Yellen rollercoaster ride
