How are business or investors supposed to plan their investments in the US when the Federal Reserve is giving out such mixed messages? The credibility of the world most important central bank is coming under ever more scrutiny by the market in the wake of events of the past couple of weeks. A significant dovish shift in monetary policy in the official FOMC statement, dot plots and press conference by Janet Yellen has been strangely undermined in the days since as a series of hawkish messages have emanated from Fed members. There has been a reaction from the dollar but also across asset classes as exasperated traders wonder exactly how they can now take the Fed guidance. What does this all do for previously relied upon messages of forward guidance, the dot pots and how the market can actually trust what we get from the Fed? The impact continues to be felt on markets this week which culminates in a crucial day of economic data on Friday. What does this mean for the crucial Non-farm Payrolls data this week, but what else is on the economic calendar to drive markets?
The big question is whether the recent strength of the US dollar can last? This is a discussion considered in our foreign exchange outlook, but also what is the outlook across the forex majors? There is also a technical analysis of crucial major pairs such as Euro/Dollar and Dollar/Yen.
What is the outlook for equity markets in the wake of some significant moves from the major central banks in recent weeks? Are we set up for another correction, or are the bulls still hanging on for further gains? There is also a technical analysis of the German DAX Xetra and the FTSE 100.
There is also a look at the impact on key commodity markets and also the recent developments on bond markets. We finish with a technical analysis of gold and Brent Crude oil.