Saxobank cheføkonom Steen Jakobsen efter FED møde:
Small changes to text:
– Acknowledge the inflation undershoot
– Keep indicating balance sheet run-off but changing timing from this year to relatively soon
Fixed income market not concerned about run-off date (likely announcement September – for December) – as seen here 2-30 Y small down in yield….
Conclusion:
FED wants to believe in Phillips curve- (correlation btw employment and inflation) they are soon alone on this subject, never the less the hawkish tone is probably also a poor attempt to reign in stock market expecations.
Bias:
Long gold – biggest overweight
Still OW Fixed Income
Short Dollar
Chart supports:
Data remain weak – maybe even so weak some improvement could happen……
Inflation – slightly “under-shoot”? I don’t know which planet Fed is from……
This is my FAVORITE long position into autumn – GOLD is retaking 100 SMA tonight and long Gold spot, and gold mining stocks my one OVERWEIGHT for balance of 2017… low-flation, recession risk, weak dollar, dovish- tilt from ECB soon….
Our longest held view: The weaker US dollar – it’s hitting support levels, long-term trend remains towards 90-88 in Dollar Index and EURUSD should be toppish 1.17/1.1750…… (like USDJPY above 114.00)
