Will today’s data confirm or deny the rising sentiment that the overnight rate will be 0.50% by September 2015? Fed Funds futures which are a gauge of market sentiment now suggest a 79% chance that such will occur. That compares with a 63% chance at the conclusion of the last FOMC meeting.
Some have commented about the volatility in views for did not August’s employment data released last Friday lengthen the expected time frame?
To write the obvious, all are on edge about monetary policy for a myriad of reasons including the now accepted view that a significant amount of the gains is the result of an extremely accommodative Fed and the fact that never has a change in monetary policy been attempted at current levels. Mistakes will be made given the lack of benchmarks.
As noted above, today’s data can influence views about monetary policy as weekly jobless claims are reported. Policy is mono dependent upon jobs and according any statistic that involves employment will have an outsized influence.
Commenting upon yesterday’s market activity, trading was relatively subdued. Treasuries declined in price again, marking the longest downturn in prices since spring and yields are now at the highest level in about a month. Equities were quietly higher led by the technologies.
Last night the foreign markets were mixed. London was down 0.40%, Paris down 0.26% and Frankfurt up 0.02%. Japan was up 0.76%and Hang Sang down 0.17%.
The Dow should open flat with attention focus upon last night’s speech by President Obama and its infinite number of possible intended and unintended consequences. The 10-year is up 5/32 to yield 2.53%.
Today is 9/11. Please take the time to reflect about the significance of today and please pay respect to those who made the ultimate sacrifice for our country.