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20 Mar 2015
Sense of reality returned to markets post FOMC - ANZ
FXStreet (Bali) - As the ANZ FX Strategist Team notes, a sense of reality returned to markets overnight after the post-FOMC market reaction.
Key Quotes
"A sense of reality returned to markets overnight after the post-FOMC market reaction. Yes, the Fed was dovish and as one commentator put it, “[USD] bulls need a lot of feeding”, so short-term displacement action is inevitable (even amongst trends) when positioning becomes extreme."
"This begs the question as to whether the USD trend has changed? The long-run outlook for GDP and inflation in the US is solid and there is still clear divergence on offer between the Fed and ECB and BoJ policy."
"Greece’s problems linger; odds of a euro exit are non-trivial (though arguably that should make the euro core stronger)."
"The Fed and markets may be taking more cautious nuances from the string of weaker data in Q1, but we expect the data to bounce back with vigour in Q2."
Key Quotes
"A sense of reality returned to markets overnight after the post-FOMC market reaction. Yes, the Fed was dovish and as one commentator put it, “[USD] bulls need a lot of feeding”, so short-term displacement action is inevitable (even amongst trends) when positioning becomes extreme."
"This begs the question as to whether the USD trend has changed? The long-run outlook for GDP and inflation in the US is solid and there is still clear divergence on offer between the Fed and ECB and BoJ policy."
"Greece’s problems linger; odds of a euro exit are non-trivial (though arguably that should make the euro core stronger)."
"The Fed and markets may be taking more cautious nuances from the string of weaker data in Q1, but we expect the data to bounce back with vigour in Q2."