UAE- US Fed in watch and wait mode

Date

2/6/2016 11:48:50 PM

(MENAFN- Khaleej Times)

The Fed stayed away from pulling up any punches during their first meeting for this year and if you marvel why the reason is as simple as it can be.

They have become the slave of global market volatility and this has pushed back any expectations which were in line with the dot-plot plan according to which they could have been incrementing the interest rates three to four times this year. The upcoming US NFP payrollcould thwart those expectations even further if it confirms that the frailty is the chief theme in the labour market as well.

The Fed has not only become dependent on domestic matters but they have also tuned their station to offshore market volatility which is evoked due their decree of a rate hike. One affair that is still apathetic today is the rout in oil prices. Although we are confident that a bottom could be forming between $20-$30 mark if it is not already formed but every single adverse headline for oil is impacting the sentiment for the global market.

Therefore the Fed is largely in the watch-and-wait mode and any rebellious economic condition will push their hand to make a U-turn on their current policy. Emerging markets are paying their price and investors are losing their confidence if the central banks have the correct vaccination because every single medicine appear to have less influence in contrast to the preceding one.

Thus the upcoming US NFP data without any doubt will be the most significant affair for traders and they will try to benchmark every component of this report. The forecast is for 192000 which is a much lower revised number in contrast to the previous reading of 292000. The average hourly number is expected to tick higher and the forecast is for 0.3 per cent while the unemployment rate is expected to remain pat at five per cent.

The writer is chief market analyst at Avatrade in London. Views expressed are his own and do not reflect the newspaper's policy.

Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.