Worldwide Trend Risks To FOMC Decision
In light of the Federal Open Market Committee’s (FOMC) March policy meeting, all the attention is focused on the first conclusions that the group will reveal on Wednesday evening. While both the US Dollar and the S&P 500 risk losing traction of their bull trends, financial analysts all over the world are also concerned about the volatility of the other major currencies.
As US Dollar continues its rally, back in the Eurozone the ECB announced that the reduction of bearish fuel that supplies the Euro has conducted to significant confidence for the local capital markets. Yet, the Greece issue persists, as the meeting between the Greek and EU representatives that took place on Tuesday left both parts still seeking for a progressive solution.
Shortly after the policy event, New Zealand will report 4Q GDP. The economy experienced a modest 0.8 percent growth through the final months of 2014 and even if the RBNZ seem neutral, an economic push could tip them dovish.
China continues to remain one of the most under-appreciated risks to the global financial system. As one keeps being focused on US policy and EU unity, he should take into consideration the consequences of the credit boom experienced in the world’s second largest economy, as the country reports three quarters Chinese assets in real estate.
In comparison to previous FOMC meeting, one is looking forward to receiving updated forecast regarding inflation, employment and interested rates, as Chairwoman Janet Yellen stated in her press conference. The key word seems to be “patience”, as the first hike would be more than three months out.