Forex news headlines for December 14, 2016:
Federal Reserve:
- FOMC hikes rates by 25 basis points, as expected
- Full FOMC Statement for December 2016: Fed hikes by 25 Basis points
- The dot plot of Fed interest rate projections sees 3 hikes in 2017
- FOMC Central tendencies from the December 2016 meeting
- Yellen Q&A: I want to emphasize the change in the dot plot is very modest
- Yellen press conference: Expect inflation to rise to 2% over next couple of years
Other news:
- US November retail sales +0.1% vs +0.3% expected
- US PPI final demand for November +0.4% vs. +0.1% estimate
- November US industrial production -0.4% vs -0.3% expected
- Canada Teranet/National Bank house price index Nov 198.82 vs 198.35 prev
- Atlanta Fed GDPNow estimate 2.4% vs. 2.6% last
- US weekly oil inventories -2563K vs -1500K expected
- US October business inventories -0.2% vs -0.1%
- Iraq raises oil exports - shipping documents
- ESM bailout fund puts implementation of short-term Greek debt relief on hold - statement
- Record low yield for German 2 year Schatz
- UK Brexit Minister Davis: Will publish Brexit strategy "as soon as we can"
Markets:
- Gold down $16 to $1142
- US 5-year yield up 12 bps to 2.02%
- WTI crude oil down $2.10 to $50.89
- USD leads, JPY lags
- S&P 500 down 19 points to 2252
The Fed hike wasn't priced in after all.
The US dollar roared higher after the first rate hike in a year. It jumped on the headline and it continued higher as the dots moved up. Later, Yellen endorsed the dot path and that added another push.
In total, nothing from the Fed was particularly surprising or as hawkish as the market moves might suggest. Instead, it's an indication of dollar buyers (and bond sellers) who were waiting on the sidelines.
