That's right folks, on Wednesday we get Slovakia's industrial production at 08.00 GMT
I kid you of course, it's the FOMC on Wednesday.
Interest rate probabilities are still sitting at 100% for a hike Wednesday. 92% of that is in favour of a move from the Fed Funds rate range of 0.25-0.50% to 0.50-0.75%. The balance of 8% is looking to 0.75/1.00%.
There's always a chance that the Fed don't hike but I think that's very small. They've really run out of excuses for not hiking now and it's probably not a coincidence that they are hiking the same time as last year.
For me, it's not about the hike (unless it is bigger than expected) but about the message that comes with it. The Fed were reluctant to paint a bullish picture last year and I don't believe they'll do so again this year. The message is up to Yellen & Co though, so we'll have to wait.
There's a very good chance that we get a similar reaction to the hike we got last year but to a lesser degree. Certainly given the time of year, there's ample scope to see a kneejerk jump in the dollar, to which the world and his mate who have been buying for a hike, will take profit on before the end of the year. If you're long and running it over the FOMC, that might be the time to take some off the table and lock in your profits on the rest. Time and time again this year we've seen a minimal expected reaction in FX to rate moves from central banks, and then a bigger move in the opposite direction.
As for my expectation, I'm going for a 25bp hike and a positive but not exuberant statement from Yellen.
What are your thoughts? Another 'one and done' for 2017, or will Yellen give a hawkish indication of more to come?
