MM #138 – The art of the dovish hike

The Ides of March proved to be ominous for dollar bulls as the Fed succeeded in beating the greenback while hiking rates. We discuss what this means and touch on other market moving events before previewing the next week.

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  1. We told you: The Fed probably took advantage of the rally in stock markets to bring forward a hike, as we told you. Otherwise, it is hard to find an explanation for raising rates without upgrading the outlook. The move hurt the dollar and allowed stocks to rally.
  2. What’s next? The Fed seems to gain more market-moving power. How many rate hikes can we expect for 2017? Markets are only slightly less bullish and we will all be looking at the data. This promises higher volatility.
  3. Other events: The BOE surprised with a hawkish tilt and Dutch voters did not provide much support to the extreme right, boosting the pound and euro respectively.
  4. Preview: A calmer week awaits markets but Yellen and dissenter Kashkari have their chance to move markets. Also note the durable goods orders.

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Trade safely!

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