2015/03/19 TrendView VIDEO: Global View (early)
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TrendView VIDEO ANALYSIS & OUTLOOK: Thursday, March 19, 2015 (early)
Global View: All Markets
Well, it is mostly exactly as we suspected on the Fed removing critical ‘patience’ from its statement, yet respecting recent weakness of US and global economic data in substituting something which was just as dovish. In this case that was two-fold. It was both the rightful down grade of their projections for future growth and inflation, and how they were going to remain cautionary in their implementation of policy in spite of the removal of ‘patience’. In other words, nobody should imagine for a moment that translated into impatience. At one point in the press conference Chair Yellen said it best (in terms that hark back to the Bernanke perma-dove iteration): “Our policy needs to be data dependent.” So no matter what might have been inferred from previous discussion of the US Unemployment Rate or other such singular indications, the Fed will maintain very broad assessment of indications and conditions in its deliberations.
At one point some commentators had characterized the Fed’s more diverse assessment as more of a ‘dashboard’ than a single critical indication in the wake of the 2008-2009 financial crisis. Fair enough. It is entitled to take a wide ranging view. But it has become so complex that some are postulating this is just an excuse to not raise rates, and mask the degree to which the Fed is now ‘market-driven’. Another wag (and notorious Fed critic) noted Ms. Yellen’s performance was ‘Greenspanesque’ (not meant as a compliment), and that the broad range of factors now meant the Fed’s ‘dashboard’ was like the control panel of an F-16 fighter jet… so complex as to defy the understanding of most observers.
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Video Timeline: It begins with a macro (i.e. fundamental influences) brief mention of some of the factors noted above. It also noted that after little overseas data this morning there were no US economic releases at all on Friday. So whatever stands from Thursday’s FOMC influence will remain through the end of the trading week.
It moves on to JUNE S&P 500 FUTURE short-term indications at 01:15 and intermediate term view at 04:15, OTHER EQUITIES from 06:30, GOVVIES analysis beginning at 11:30 and SHORT MONEY FORWARDS 17:30. FOREIGN EXCHANGE begins with US DOLLAR INDEX at 20:00, jumping over to EUROPE at 22:00 and ASIA at 24:30, followed by the CROSS RATES at 26:45 and a return to JUNE S&P 500 FUTURE short term view at 30:00 for a final look and additional perspective. As this is an especially extensive analysis due to the need to discuss some of the futures expiration rollover factors and especially Thursday’s FOMC impact, even more so than usual we suggest using the timeline cursor to access the analysis most relevant for you.
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Authorized Gold and Platinum Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion and TrendView Video Analysis and General Update. Silver and Sterling Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion.
2015/03/18 Concise Non-Video Comment (early)
2015/03/18 Concise Non-Video Comment(early)
© 2015 ROHR International, Inc. All International rights reserved.
The analysis videos are reserved for Gold and Platinum Subscribers
CONCISE COMMENT (Non-Video): Wednesday, March 18, 2015 (early)
Tuesday’s TrendView Global View video analysis and the General Update Market Observations from after the US Close (including many views on the interim fixed income trends into the March futures expirations and longer-term foreign exchange trend tendencies) remain the relevant view and trend assessment into today. While in many cases markets enter a quiet period prior to the major FOMC announcement with press conference meetings, there has been quite a bit of movement of late.
And it is no secret that a significant focus has been placed on whether the ‘patience’ language will be removed regarding the potential for future rate hikes. Of course that initial move is particularly critical, as it will be the first FOMC rate increase in nine years. There is much concern in various asset classes on the impact of such a minor move, as it has classically represented a shift not just in the nominal rate but also the trend of rates.
Typically the Fed tends to move quickly once the rate direction changes. Yet the operative question in this cycle is whether it is indeed ‘typical’? We think not. In spite of the stronger US Employment numbers of late, for various reasons that does not represent the sort of additional economic strength which would typically cause the Fed to ramp up rates via serial increases after the initial hike. There are the weak Hourly Earnings figures even within the jobs numbers, and extended reflections of weakness in much other data.
As such, while the FOMC may remove the term ‘patience’ today regarding any future rate hike prospects, it will substitute some sign that it will remain ‘data driven’. In other words, if there is no acceleration in either wages or signs of accelerating consumer activity and confidence, the Fed will allow itself plenty of time prior to that first rate hike. It will also signal that it is not necessarily the kickoff for any rapid progression of further interest rate increases to follow. While lower energy prices will be of benefit to consumers, there has been no evidence in recent data this has translated into greater spending.
Authorized Silver and Sterling Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion. Non-subscribers click the top menu Subscription Echelons & Fees tab to review your options and join us. Authorized Gold and Platinum Subscribers click ‘Read more…’ (below) to access the extended trend assessment.
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