What is the Fed trying to tell us? Markets are anticipating the Fed decision in June and might be caught wrong-footed. OPEC made its decision and we had a “sell the fact” reaction. But there’s much more inside. We top it off with previewing the next week.
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- Fed minutes, hints and hikes: There is a high chance of a rate hike in June according to bond markets, but we beg to differ. We dig the doubtful comments from the minutes, note critical data points for the data-dependent Fed and try to understand the potential market reaction to a pushback. And what about the squeeze of the balance sheet? Do we have the ingredients for a hawkish hold?
- OPEC: Apart from a classic “buy the rumor, sell the fact”, did exemptions for Libya and Nigeria also play a role? What about US shale output. We digest the moving parts shaping the price of the black gold.
- Preview: As we turn the page to June, the buildup to the NFP is short and sweet this time. Chinese data is also key as worries mount and we also eye EZ inflation and the UK polls.
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