Once again, the consensus for the first rate hike from the FOMC has slipped further into the distance as the Fed Chair gave a dovish tone at the post-FOMC meeting press conference. The first move remains conditional on further improvement in the labour market and when the Fed is “reasonably confident that inflation will move back to its 2% objective”. There was also an emphasis that the rate moves would be more gradual when they do come about. The dollar was weaker as a result, with EURUSD moving to the top of the recent range, with near-term resistance coming in at 1.1380/86 area. Cable took a turn for the better, making new highs for the year at 1.5851.
Once again, Greece is top of the agenda with Eurozone finance minister meeting to discuss the issue. There are no signs that any agreement or progress is going to be made, so if anything markets will be looking for signs of where we go from here with compromise and agreement not on the agenda. So overall markets have twin forces to contend with, with for the moment, is proving to be steady to softer for equities, with the softer dollar tone continuing in Asia, especially against the yen. Focus later on will be with the CPI data in the US, where core rate is seen holding steady at 1.8%, headline moving back into positive territory from -0.2%.