31 July 2017

Bassanese Bites: America’s Goldilocks Economiy – Week beginning: 31 July 2017

It was a fairly flat week across global markets, with US stocks still flirting with record highs, the $US on the back foot, and bond yields still largely range-bound. The big market move was a solid 8.6% rebound in oil prices after Saudi Arabia pledged to cut exports in order to reduce global excess supply. US shale oil producers rubbed their hands with glee!

The major market event was the dovish interpretation traders placed on the Fed’s post-meeting policy statement. Exactly why is not clear: although the Fed acknowledged inflation remained below its 2% target level, it still indicated “gradual increases” in rates is still likely, and balance sheet normalisation could begin “fairly soon”……….

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