{"id":118991,"date":"2018-01-03T06:58:17","date_gmt":"2018-01-03T11:58:17","guid":{"rendered":"http:\/\/countingpips.com\/?p=118991"},"modified":"2018-06-01T15:46:49","modified_gmt":"2018-06-01T15:46:49","slug":"fomc-minutes-under-the-spotlight-will-dollar-bulls-attack","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2018\/01\/fomc-minutes-under-the-spotlight-will-dollar-bulls-attack\/","title":{"rendered":"FOMC minutes under the spotlight; Will dollar bulls attack?"},"content":{"rendered":"
January 3, 2018<\/div>
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Article by ForexTime<\/a><\/p>\n

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Investors kicked off 2018 on a positive note sending U.S. stocks to fresh highs on the first trading day. The optimistic approach on day one was supported by encouraging economic data from China, where the Manufacturing Purchasing Managers\u2019 Index for December beat expectations by coming in at 51.5 versus expectations of 50.6.\u00a0 Europe was also a bright spot, as factories reported their most robust monthly performance since the creation of the single currency. Eurozone PMI hit 60.6 in December indicating that growth likely to remain healthy in 2018.<\/p>\n

The missing ingredient for global economic expansion throughout 2017 has been inflation, but with consumer demand increasing, unemployment dropping, and commodity prices surging, it\u2019s difficult not to see inflation returning in 2018.<\/p>\n

One of the most debated topics last year was the flattening yield curve in the U.S. In December the US 10 Year \/ 2 Year Treasury spread fell to 50 basis points, a level last seen in 2007- signaling that a recession is around the corner. However, when we look at the economic performance in the U.S. and on a global scale, there isn\u2019t any indication of one occurring soon.<\/p>\n

Looking forward, I believe Treasury Bond Yields will be a must watch indicator for how the U.S. stocks and the dollar perform in 2018. If the Phillips curve \u201cthe inverse relationship between the level of unemployment and the rate of inflation\u201d finally wake up after being dead for the last couple of years, the yield curve should start steepening. The dollar\u2019s performance which opened the New Year on a downward trajectory, will depend on the magnitude of change in the yield curve. A rise in U.S. 10-Treasury yields towards 3% – 3.5% this year, will likely reverse some of the dollar\u2019s 2017 losses, however, a steeper move will have negative consequences on stocks, with the probability of 5%-10% pullback increasingly likely.<\/p>\n

Today\u2019s FOMC minutes will provide some assessment on the U.S. inflation outlook. If the central bank reveals concerns over upside inflation expectations due to fiscal policies and an improved labour market, investors are likely to cover some of the dollars short positions. This should be reflected in interest rate expectations for March which currently indicate a probability of 56.3% rate hike in March, according to CME\u2019s Fedwatch.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

Disclaimer:\u00a0<\/strong>The content in this article comprises personal opinions and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/em><\/p>\n

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\"Forex-Time-Logo\"Article by ForexTime<\/a><\/span><\/strong><\/p>\n

ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Article by ForexTime Investors kicked off 2018 on a positive note sending U.S. stocks to fresh highs on the first trading day. The optimistic approach on day one was supported by encouraging economic data from China, where the Manufacturing Purchasing Managers\u2019 Index for December beat expectations by coming in at 51.5 versus expectations of 50.6.\u00a0 […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-118991","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/118991","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=118991"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/118991\/revisions"}],"predecessor-version":[{"id":119004,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/118991\/revisions\/119004"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=118991"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=118991"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=118991"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}