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    US: Close to zero chance of any action from the Fed - BNZ

    Research Team at BNZ, suggests that there is no shortage of global influences this week as the US Fed, BoJ and BoE all have meetings.Key Quotes“There is close to zero chance of any action from the US Fed. However, the market will be focused on the latest Fed ‘dot’ points. In recent publications they have moved in only one direction. Down. Still, they remain well above current Fed fund futures pricing. This shows the FFR below 1% in three years’ time. In the wake of the soft May payrolls report, Fed Chair Yellen would need to sound very assertive on a summer hike to nudge pricing higher. This would fly in the face of her self-proclaimed ‘cautious’ approach. A July hike is currently priced at less than 20%.Both the Fed and BoE will also be painfully aware of the closeness of current polls for the UK’s EU referendum. The poll is now less than ten days away. It seems certain that if a ‘Brexit’ result prevails, both central banks will initially implement looser monetary policy than would otherwise be the case. The market currently prices around a 50% chance the BoE cuts its cash rate from 0.5% within the year ahead. It is unlikely to make any changes this week.”

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