Yellen Sinyalkan Hike Rates, Tapi Tergantung Gejolak Pasar

Ketua Fed Janet Yellen mengatakan bahwa Federal Reserve masih mengharapkan untuk adanya kenaikan suku bunga secara bertahap di saat mereka juga berusaha membuat itu jelas bahwa masih berlanjutnya gejolak di pasar dapat membuat bank sentral tentunya menjauh dari beberapa kenaikan suku bunga yang telah diperkirakan oleh pembuat kebijakan untuk tahun 2016.

Yellen dalam testimoninya yang diberikan pada hari Rabu kepada House Financial Services Committee di Washington mengatakan bahwa kondisi keuangan di Amerika Serikat akhir-akhir ini menjadi kurang mendukung untuk pertumbuhan ekonomi. Pada perkembangan ini, jika ekonomi terbukti lesu, dapat membebani outlook untuk aktivitas ekonomi dan pasar kerja.

Yellen, yang memulai  testimoni selama dua hari di Capitol Hill juga mengatakan kepada anggota parlemen bahwa ketidakpastian atas prospek ekonomi China dan kebijakan nilai tukar "telah memperburuk kecemasan terhadap outlook untuk pertumbuhan global" dan ditambah dari penurunan terbaru dari harga minyak dan komoditas lainnya. Penurunan harga yang lebih dalam di harga komoditas dapat memicu tekanan di seluruh dunia yang akan mengancam terhadap permintaan ekspor AS, ucapnya.

Yellen masih membuka pintu untuk kenaikan di bulan Maret, meskipun dia tidak secara eksplisit merujuk waktu pengetatan kebijakan atau pertemuan atau pertemuan Fed selanjutnya.

Ward McCharthy, kepala ekonom di Jefferies LLC di New York mengatakan bahwa dia masih memegang senjatanya. Gejolak di pasar keuangan  tidak akan membuat mereka mundur. Itu bisa saja mempengaruhi kecepatan dimana mereka akan menormalkan suku bunga, namun mereka masih berkomitmen untuk menormalkan suku bunga.

The Fed tetap membuka kemungkinan kenaikan suku bunga

The Fed tetap membuka kemungkinan kenaikan suku bunga tapi menegaskan ingin melihat dulu perbaikan ekonomi dan kenaikan inflasi sebelum melakukannya.

Pernyataan dari the Fed pasca rapat regulernya memang tidak menyediakan waktu kenaikan. Banyak analis memperkirakan kenaikan pertama terjadi pada September nanti, tapi sang ketua Janet Yellen menegaskan bahwa keputusan kenaikan rate bergantung pada ekonomi ekonomi terkini.

Memang, dalam pernyataan itu, the Fed mengakui lapangan kerja, perumahan dan pembelanjaan konsumen membaik. The Fed masih optimis inflasi bisa menyentuh targetnya 2%. Pernyataan rapat terakhir hanya sedikit berubah dari rapat bulan sebelumnya, di mana modifikasi mengindikasikan ekonomi semakin sehat.

Menggambarkan kondisi lapangan kerja, the Fed untuk pertama kalinya menyebut ”solid” untuk pertumbuhan lapangan kerja dan penurunan tingkat pengangguran, yang menyentuh level terendah dalam tujuh tahun di 5,3%. Selain itu, the Fed mengindikasikan hanya membutuhkan sedikit lagi perbaikan lapangan kerja, bukannya perbaikan sigfinikan seperti sebelumnya, sinyal bahwa lapangan kerja mendekati maksimal.

Michael Hanson, ekonom dari Bank of America Merrill Lynch, mengatakan pandangan optimis the Fed mengenai lapangan kerja mengindikasikan para pejabat semakin dekat dengan kenaikan suku bunga. Ia memperkirakan itu terjadi pada September. “Mereka belum memutuskannya, tapi kita semakin dekat dengan memenuhi kriteria untuk kenaikan suku bunga,” katanya.

Yellen pernah menekankan bahwa bila the Fed menaikkan suku bunga, hanya akan dilakukan secara bertahap. Tujuannya agar tetap membantu ekonomi yang masih membutuhkan bunga rendah. Ia mengindikasikan kenaikan dalam jumlah kecil, lalu rehat sembari mengevaluasi dampak kenaikan itu.

Sumber : Strategydesk

Pasca FOMC Dollar Menguat

Posisi dollar stabil hari ini setelah reli kemarin, dipicu oleh the Fed yang menyampaikan pernyataan optimis mengenai lapangan kerja. Meski the Fed tidak secara jelas menyebut waktu kenaikan suku bunga, pasar masih meyakini September.

Pasca rapatnya, the Fed kembali menyampaikan pernyataan yang ambigu. Di satu  sisi mengakui perkembangan positif dalam pertumbuhan lapangan kerja, salah satu komponen penting dalam mempertimbangkan kenaikan suku bunga. Tapi di sisi lain, melihat inflasi belum sesuai target. Meski tidak secara jelas menyebut waktu kenaikan suku bunga, dan menegaskan keputusan bergantung pada data, pernyataan optimis the Fed dianggap oleh pasar sebagai isyarat proses normalisasi kebijakan tetap berjalan.

Memang saat ini inflasi masih di bawah target 2% dan ada perkembangan eksternal yang tidak kondusif, seperti krisis utang di Eropa dan kejatuhan bursa saham China, situasi yang turut memperumit pengambilan kebijakan. Namun, para analis tetap melihat era bunga nol mulai berakhir. Sebagian besar dari mereka memperkirakan September sebagai waktu kenaikan.

Setelah the Fed lewat, pasar kini menunggu data PDB AS kuartal kedua. Ada harapan, pertumbuhan lama periode April-Juni lebih baik dari periode tiga bulan sebelumnya Menurut proyeksi, PDB tumbuh 2,5% di kuartal kedua setelah kontraksi 0,2% di kuartal pertama. Seperti biasanya pada Kamis, ada jadwal initial jobless claims. Data yang bagus tentunya bisa mendukung posisi dollar.

Indeks dollar berada di 97,20 setelah menguat 0,7% kemarin. Kondisi bullish terjaga bila mampu ditutup di atas 96,50-96,70. Terhadap yen, dollar menguat untuk tiga sesi berturut-turut. Hari ini menanjak 0,2% ke 124,12 dan penutupan di atas 124,30 menjaga posisi bullish-nya.

Data ekonomi penting lain terjadwal hari ini tingkat pengangguran dan inflasi Jerman. Sebagai ekonomi terbesar Eropa, data Jerman sering mempengaruhi pergerakan euro.  Namun euro sudah melemah selama tiga sesi terakhir, setelah gagal bertahan di level tertinggi dalam dua minggu Senin lalu. Euro melemah 0,1% ke $10,970 setelah jatuh hampir 1% kemarin. Euro sudah jatuh ke bawah MA 25 dan penutupan di bawah $1,0980 menjadi bearish continuation dengan target $1,0920-1,0900.

Sumber : StrategyDesk

ADP employment review

ADP employment data to be released at 13:15 GMT is today's top data watch from USA.
What is ADP employment?

• The report is a measure of non-farm private sector employment which is obtained by utilizing an anonymous subset of roughly 400,000 U.S. businesses which are clients of ADP.

• This data is a very good measure of employment strength of the economy and a good precursor of Nonfarm payroll data.

Previous performance -

• Non-farm private sector employment grew at 213,000 last month.
• Small business sector hiring at 78000.
• Employment in franchise increased by 26,000.
• ADP data is broken down by sectors in chart that shows construction and the service industries job growths are among highest whereas manufacturing and financial activities lag behind. Employment in recent time started picking up in trade and utility sector.

Expectation Today -

• Market is expecting another solid job growth with average expectation is 220,000 to be the headline number.
• Construction and utility sector would be vital to watch in the midst of falling commodity prices.

Market Impact -

• Treasuries are the securities to watch as stronger report could push the yields further.
• In such case dollar might also show some strength though it is expected to be mixed among the pairs. Lots of pairs are either trading at support or resistance. Dollar index is currently trading at 95. 71 up 0.4 percent for the day.

Yellen Heading to the Senate

All eyes will be focused on Federal Reserve Chair Janet Yellen as she presents the semi-annual monetary policy testimony to the Senate Banking Committee. I anticipate that she will stick to an economic outlook very similar to that detailed in the last FOMC statement and related minutes. Expect her to indicate that the Fed is closing in on the time of the first rate hike - after all, this was clearly the topic of conversation at the January FOMC meeting. I anticipate the "Audit the Fed" movement will be on display in the Q&A, which will provide Senators the opportunity to display their ignorance of monetary policy. And with any luck, we will learn how "patient" the Fed really is.

That said, I am wary of expecting much in the way of insight on "patient." The Fed has trapped itself with that language, and I am thinking that it will take the collective power of the FOMC to devise a way out. And they have little choice but to deal with that issue at the March FOMC meeting. The basic problem is this: The hawks would be happy with pulling the trigger on 25bp at the March meeting. The center isn't ready to go along with that, but they want the option of being able to pull the trigger in June. But Yellen, in trying to signal in December that a rate hike was not imminent, linked the term "patient" to two meetings. So if they keep "patient" in the statement, it seems to imply that June is off the table, but that message will brings squeals of unhappiness from the hawks and even leave the center uncomfortable. But just pulling "patient" risks leaving the impression that a June hike is a certainty, which is a message the center doesn't want to send.

If you think this is a dumb way to manage monetary policy, you are correct. Now that the Fed is closer to meeting their employment mandate, they simply cannot credibly signal intentions six months in advance. They need to let the data start doing the work for them, but don't know how to make that transition.

It something of a shame that Yellen couldn't leave well enough alone in December and let financial market participants believe that "patient" would be used as it had been in 2004. In that case, "patient" would have no time horizon other than that dropping the word "patient" meant that a rate hike was likely just one meeting away. They could credibly manage such a signal. Anything more than one meeting ahead is problematic.

On the economic outlook, I would say that if Yellen were to deviate from the January FOMC meeting, it would be in a generally positive direction. I think they will take the subsequently released upbeat employment report as strong evidence that underlying trends remain solid. The news that Wal-Mart is raising salaries will likely be viewed as just the tip of the iceberg. I doubt anyone on the FOMC believes Wal-Mart leadership acted out of the kindness of their hearts. Yellen herself will probably think something to the effect that "I told you that the quits rate was important."

Assuming the Greece situation holds together for another 24 hours, that coupled with easing by global central banks in recent weeks will lead FOMC members to believe that global risks have dissipated. And to top it off, US equities pushed back to record highs. What's not to like? Maybe the GDP numbers, but Cleveland Federal Reserve President Loretta Mester gave what I think is the consensus view on the topic:

WSJ: Putting aside the tailwinds that you’re seeing. The growth data look a little soft at the moment.
MESTER: Not really. The fourth quarter came in after two quarters of really robust growth. The employment report actually was revised up for those last couple of months. There is this tendency to look at the last data point. I’m just not that concerned. I think we’ve seen growth pickup. I think there is more momentum in the economy.

Hence why I also don't agonize about what a snowstorm means for monetary policy. It means nothing.

There is plenty on the docket beyond Yellen this week. Existing and new home sales, consumer confidence, regional Fed manufacturing indexes, durables goods orders, CPI, Case-Shiller, GDP revisions, and, if that weren't enough, speeches by Fed Presidents of Atlanta (Lockhart), Cleveland (Mester), and New York (Dudley), and Federal Reserve Governor Stanley Fischer. The fun just won't stop!

Bottom Line:  I expect the Fed will continue to walk the fine line between keeping June in play while signaling that the data will soon justify a rate hike though not necessarily in June. And watch for signs of an effort to shift the focus to the expected gradual pace of rate hikes in an effort to minimize adverse market reaction to the possibility of June. Expect generally positive views of recent data; the Fed thinks the economy is finally on the right path.

Source : Timduy

FED to tighten policy – monetary base edition

The chart shares the size of the US monetary base since 2007.
Key notes -

• Aftermath of great recession of 2008, US Federal Reserve announced (FED) its asset purchase programme also known as Quantitative Easing (QE). Since 2008, FED announced targeted QE as well as open ended programme.

• In 2014 the FED has completed its purchase programme and expressed its desire for tightening through raising interest rates from record low near zero.

• So far it has not declared to shrink the balance sheet which it will eventually at a later date. Clearing up the balance sheet would be more bullish for the US dollar and may not be good news for the stock market and especially bond market. Despite so some shrinkage appears in the sheet which could be due to expiring tenure of the securities held.

Analogy -

• FED has now ever more power to influence the value of the Dollar and bonds with staggering balance sheet size of $ 4 trillion.

• Despite the tightening, stock market is expected to head higher, riding on the positive economic growth.

• Concerns are there over the bond market liquidity but it is fair to expect that the FED will eventually manage to shrink the size of the base.

Under such circumstance Dollar is expected to perform well against majors and emerging economies.

Fed likely to hike rates in September

The minutes of the U.S. Federal Reserve policy meeting held on 27 and 28 January were released on Wednesday. The policymakers were concerned that tightening of the monetary policy could damage the economy and reduce the possibility of achieving inflation target of 2 percent.

"I think it's probably much more dovish than anybody anticipated, that's for sure," said Greg Peters, senior investment officer at Prudential Fixed Income. "I think June is going to be hard for them to move, but that's not to say they won't."

However, the policy makers have signalled that the central bank is thinking of June as the month to start hiking interest rates. The minutes highlight the profundity of the Fed's inflation debate and underscore the desire to keep the rates lower for longer.

But "it looks increasingly likely that the Fed will wait longer," economist Paul Edelstein of IHS Global Insight wrote in a note to clients.Economists view September as the month when the Fed will start to hike rates. They expect weak inflation figures later this year, due to the sharp fall in oil prices since June 2014. So, rate hike is expected to be postponed until the fall.

"If you have an economy that's gradually accelerating and inflation that's picking up in the second half of the year, then you would expect a rate hike around September," said Gregory Daco, chief U.S. economist at Oxford Economics.For the first time since January 2013, the Fed noted the overseas economic events and said that it would take the "financial and international developments" into consideration, with particular reference to China's slowdown, tensions in the Middle East and Ukraine.

The dollar fell against the yen and euro on Thursday, after the release of disappointing Fed meeting minutes. USD/JPY slipped 0.2 percent to 118.58, after hitting a high of 119.41 overnight. EUR/USD rose 0.2 percent to 1.1422, pulling back from previous day's low of 1.1334.

"The euro is quite stable amid the Greek risk...the immediate focal point is how risk assets fare going forward, as they have performed relatively well despite Greece. Heightened risk appetite may eventually prompt players to cover euro shorts," Ishikawa at IG Securities said.