Fed speakers, data likely to signal December hike


NEW YORK (Scrap Register): Seven Federal Reserve officials are scheduled to speak this week, with the main focus being Chair Janet Yellen on Friday and New York Fed President William Dudley on Wednesday, said currency analyst with BNP Paribas.

BNP Paribas thinks the speeches will continue to signal a likely December rate hike, currently priced around 65%.

On the data front in the U.S., BNP Paribas thinks retail sales for September (due out Friday) will have increased strongly, with the release of the iPhone 7 likely to boost control-group sales.

BNP Paribas continues to think the USD (U.S. dollar) remains vulnerable in the very short term, as gains in U.S. front-end rates have been outpaced by increased inflation expectations, pushing U.S. real rates deeper into negative territory.

BNP Paribas thinks the Dollar will ultimately gain later in the year, as the December FOMC meeting nears and market can move to more fully price in further tightening, but for now the bank sees more scope for the dollar to give back ground.

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