Fed likely to adopt a ‘wait and see’ approach – Danske Bank

Research Team at Danske Bank, believes that the Fed will adopt a ‘wait and see’ approach in its forthcoming policy meet tomorrow.

Key Quotes

“The two weak jobs reports are concerning but it seems too early for the Fed to change its economic outlook significantly at this point. We still expect it to hike in September but risks are skewed towards a later hike as it would require a rebound in employment.

We see EUR/USD in the 1.11-1.15 range but see risks skewed to the downside in coming months. The FOMC meeting this week is likely to be neutral for EUR/USD.

Muted reaction in the fixed income market. If anything, the confirmation of a ‘wait and see’ approach should be positive for global FI given the link to risk appetite.”