FOMC and UK retail sales amongst market movers today – Danske Bank

According to analysts at Danske Bank, the key event today will be the FOMC meeting, with the announcement at 20:00 CET, and Janet Yellen's press conference at 20:30 CET.

Key Quotes

“We expect no change to the fed funds target range, but instead expect the Fed to announce it will begin reducing its balance sheet ('quantitative tightening') in October. We have got most details about how the Fed wants to do this and hence we do not expect the announcement itself to have a major impact on markets, although we are still missing details about what level of the balance sheet the Fed targets in the long term. With respect to the 'dots', we expect the signal to remain unchanged at one more hike this year and three next year. We do not expect any major changes to the statement despite low inflation, as the statement already says the Fed is monitoring inflation 'closely'.”

“In the UK, retail sales for August are due out. Retail sales are very volatile on a monthly basis, but we will look for signs of whether private consumption growth remains weak due to the negative real wage growth and lower consumer confidence.”

“The Bank of Japan (BoJ) starts its two-day monetary policy meeting and is expected to announce its decision tomorrow around 05:00 CET. We expect it to keep its 'QQE with yield curve control' policy unchanged. It is widely expected that the BoJ stands pat this time and the announcement should not have any significant impact on price action.”