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Danske Daily: FOMC Expected To Announcing Tapering

ByDanske Markets
Published 09/16/2013, 07:11 AM
Updated 05/14/2017, 06:45 AM
Market movers today

This morning ECB president Mario Draghi speaks at an SME conference in Berlin, and ECB board member Praet speaks at a conference on the Global Reform of Financial Regulation and Architecture organised by LSE.

Final eurozone inflation figures for August are expected to show a decline in inflation from 1.6% to 1.3%, and thus confirm that there is plenty of room for the ECB to keep rates low and add further stimulus if needed.

We expect US industrial production to have increased 0.3% m/m in August which is slightly below consensus expectations. Empire manufacturing is likely to show further improvement.

The really big event this week is the FOMC meeting on Wednesday where the Fed is expected to announce the initiation of QE tapering. Speculation on the content of the announcement is likely to drive market sentiment until then. We expect the Fed to announce a first $10 billion reduction in treasury purchases. We also expect the Fed to introduce a lower bound for the inflation rate, such that the inflation rate must be above this level for the Fed to consider an interest rate hike.

No major events or key economic data today.

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