What's already priced in?
Almost no one expects another rate move. Rate futures are distributed as follows:
- 92.8% - the corridor stays at 3.75-4.00%.
- 7.2% - a 25 basis point hike.
In other words, the decision itself is almost fully priced in, and what will be traded are the wording of the statement and the answers at the press conference.
How are the markets trading?
The dollar has come into the event on strength. The DXY index broke through 102.00 and is holding at two-week highs. DXY is the dollar's exchange rate against a basket of major currencies.
- EUR/USD - 1.1130, a two-week low.
- GBP/USD - around 1.3300, falling for the third day in a row.
- USD/JPY - the 157.50-158.00 zone.
- AUD/USD - above 0.7000, a five-week high and the only exception.
Commodities are also at highs. Gold is trading above $4000 an ounce at three-day highs. Silver is around $54, and the December WTI futures contract is approaching $99 a barrel.
What else is on the calendar?
The day is overloaded even without the Fed. Here is the order of events:
- 16:45 MSK. Bank of Canada rate decision, press conference at 17:30.
- 17:30 MSK. EIA crude inventories at the same time.
- 23:00 and 23:05 MSK. Alphabet and Microsoft reports.
- Friday. Bank of Japan meeting.
All these events are collected in the economic calendar.
Two scenarios for the evening
No direction forecast, only volatility.
- Scenario A. The statement repeats the previous text. The initial reaction is short, and the main move comes at the press conference at 21:30.
- Scenario B. The tone of the statement changes or there are dissenting votes within the Fed. The range on the dollar, gold and indices widens sharply in the first minutes.
The main thing: the rate figure itself decides almost nothing; the market is driven by the wording and the answers at the press conference.
Trading conditions on news differ from firm to firm; you can compare them in the prop firm catalog.
Planning to trade at 21:00 MSK?
An evening when the Fed, the press conference and Microsoft and Alphabet reports all squeeze into one corridor is either the best half hour of the month or a blown account. The second option happens more often not because of direction, but because of the rules: at some prop firms the drawdown is calculated on the intraday maximum, and the 21:00 candle closes the account faster than you can move your stop. Somewhere such entries are banned altogether. Somewhere leverage is cut during data releases. This is worth checking before the evening, not afterwards in a chat with support.