FED cuts rate, BoJ and BoE leaves rates policy unchanged
Iranian Foreign Minister threaten "all out war in case of military attack on Iran
FED conducted third consecutive repo operation of $75 bln
The FED cut rates for the second time this year - in line with its "insurance cut" guidance during the July meeting - without creating too much surprise. The Hawkish reaction we saw yesterday, confirmed the ultra dovishness positioning of the market at this point. However, the knee-jerk recovery in Equities, Gold and T-Note today remains in line with medium-term trend and suggest that for now market fundamentals have not changed. Traders, are still expecting another cut by the end of the year in light of geopolitical tensions and trade uncertainty.If anything the biggest surprise from the FED remains the not-particularly-dovish attitude of the doves, which might disappoint expectation of further going into next year.
Tension in the air in the Middle East after Iran foreign Minister comments after US Pompeo said Washington stands with the Saudis and support its right to defend itself. Moreover, US Yemen Houthi spokesman today stated that US satellite images proving Iran involvement are false, adding that the missiles were launched from three sites in Yemen.
If you missed the morning briefing from the desk click HERE