Daily Note- ‘Remain’ campaign further ahead

Keep-EU & UK FlagSummary:

  • FOMC minutes shake up
  • UK: Employment slack



Good Morning,

The FOMC Minutes shook up sleepy June hike expectations and set the stage for a far-more-interesting month ahead. The US dollar jumped on the headlines but GBP was still the top performer on the day (see below for more).

The FOMC Minutes are often the most over-hyped release on the calendar but once in a while they rock markets and that was the case on Wednesday. The dollar had been under steady pressure and was at session lows moments before the release but it rocketed higher afterwards. The minutes said that most Fed members want to hike rates if growth, inflation and jobs all make progress before the June 15 meeting. In the Fed funds futures market, that sent the implied probability of a hike up to 32% from 14% (and from 4% at the start of the week). The US dollar gained 70-130 pips across the board in the aftermath of the release.

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GlobalMacro360 Daliy Note 19th May 2016


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