Video

Playlist: From the floor

Show less
10:18
From the Floor: EM, China feeling the heat
#SaxoStrats
03 August 2018 at 7:31 GMT
12:47
From the Floor: Trump ups the trade war ante
#SaxoStrats
01 August 2018 at 8:00 GMT
Video / 14 December 2017 at 8:40 GMT

From the Floor: Janet Yellen's muted goodbye — #SaxoStrats

#SaxoStrats
  • Damp squib FOMC outing sees expected hike, but USD drops
  • Gold in focus as it normally gains following Fed rate hikes
  • Copper recovering, platinum discount to gold hits record
SaxoStrats
By Michael McKenna

Wednesday's Federal Open Market Committee outing marked outgoing chair Janet Yellen's last scheduled press conference as Fed chief, and some investors thought this might have opened up the floor for some legacy-oriented remarks on policy and direction.

This did not prove the case.

"Yellen's address was extraordinarily boring, and the event was a major disappointment for dollar bulls," says Saxo Bank head of FX strategy John J Hardy.

"Although we saw the dollar knee-jerk lower following the 'dovish hike' and near-entirely unchanged statement," Hardy adds, "it was just a knee-jerk and we may see USD simply limp through to year-end [in something approaching its current range]".

USDJPY:
USDJPY
Source: Saxo Bank

In the commodities space, Saxo's Ole Hansen reports that gold is in focus again on the Fed hike as prices have responded to each of the last hikes with determined gains, with only a two-week delay seen in June of 2017.

"Wednesday's weak core CPI reading along with the stronger yen and lower yields are all bullish factors for gold," adds Hansen, who also notes that platinum's discount to the yellow metal has reached a record $370.

For more on the Fed, the AUD, industrial metals, and oil, watch today's Morning Call in full.

Federal Reserve
A perfunctory outing and priced-in hike spelled bad news for dollar bulls Wednesday.
Photo: Shutterstock

Michael McKenna is senior editor at Saxo Bank

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Tradingfloor.com and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Tradingfloor.com is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor.com or as a result of the use of the Tradingfloor.com. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail