USD FX/ RATES RETRACE EARLIER GAINS: FED KAPLAN SPEECH HIGHLIGHTFed funds flopped back under 20% implied probability for a september hike following Fed Kaplans comments.
In reality the spike higher in early US trading was largely uncalled for with Rosengrens comments not much of a real impetus for long term stability.
As previously mentioned USD trading is likely to remain choppy, im opting to buy yen and short SPX and keep away from USD exposure for the time being given the rocky STIR environment which is likely to continue until the 21st sept.
Fed Kaplan Speech highlights:
Fed's Kaplan: Case For Raising Rates Has Strengthened Last Few Months
Kaplan: Making Frustratingly Slow Progress On Inflation
Kaplan: Cost To Rates At This Low Level, Creates Market Distortions
Kaplan: Path Of Rates Will Be Shallow
Kaplan: Neutral Interest Rate Lower Than People Think
Kaplan: Monetary Policy More Accommodative Than People Think
Kaplan: Not Much Urgency To Raise Rates
Kaplan: Fed Can Afford To Be Deliberate In Its Actions
Kaplan: Markets Have Plenty Of Notice
Kaplan: Making Frustratingly Slow Progress On Inflation
Fed Tarullo:
Fed Governor Daniel Tarullo said Friday he isn't ruling out the possibility of raising interest rates this year, but declined to say how he believed the Fed should act at its next meeting on monetary policy later this month.
Mr. Tarullo, in an interview on CNBC, said mixed economic data will make the Fed's next meeting a "robust discussion."
He said some indicators of inflation have ticked up recently, but there isn't sustained evidence that inflation is near the Fed's target.
"We have an opportunity to continue to get employment gains in this country," he said.
