The market is anticipating FOMC interest rate projections

In the context of an interview, ECB president Christine Lagarde argued in favour of the central bank’s recent move to cut rates by 25 basis points citing encouraging economic data and growth prospects. She however stated that inflation has still some ground to cover to reach the 2% target and that economic fundamentals need to show further progress. Hinting at her inclination for a data driven approach, she highlighted that interest rates may not be slashed in a linear manner. ECB board member Frank Elderson will be delivering a speech at the ECB supervision annual conference while fellow board member Philip Lane will be talking about banking and payments at an event in Ireland. Auctions for the 3-month and 6-month Spanish letras shall be taking place today. The fibre is currently trading at 1.0771.

The market is all about anticipation, ahead of the FOMC meeting decision tomorrow. While the consensus is that interest rates would not be cut at this meeting, expectations are mainly centred around rate cut projections. Inflation data due earlier tomorrow could possibly provide some clarity about the underlying trend. The OPEC monthly report is due today. Meanwhile, oil prices have surged over expectations that the group of oil producers would raise production over increased demand. The WTI crude was trading at USD 77.72 a barrel at the time of writing. Data due today include the NFIB business optimism index and the Redbook index. The greenback was trading at 105.13 at the time of writing.