Today at 21:00 MSK the Fed publishes the minutes of the meeting from September 15-16. This is a detailed account of the discussion within the committee on rates, inflation and the labor market. The market already knows the decision of the September meeting itself. What will be new is how strongly the participants disagreed and what arguments were voiced regarding the further path of monetary policy.
What exactly is being published
The minutes come out about three weeks after the meeting. In the document the market will look for:
- an assessment of inflation risks;
- a view on the state of the labor market;
- the participants' attitude toward further rate hikes;
- the degree of disagreement within the committee.
Particularly important are the formulations that may show how confidently the Fed is prepared to stick to a hawkish line before the next meeting.
When the next meeting is
The next Fed meeting will take place on October 27-28. Therefore today's minutes will become one of the key interim reference points before the new rate decision. After publication, the market will compare its tone with subsequent inflation and employment data.
What else comes out today
A dense block of events is scheduled before the American session and in the evening. 07:30 MSK - India central bank rate decision 09:00 MSK - Germany industrial production for August 17:30 MSK - weekly US oil inventories 18:00 MSK - annual US consumer inflation expectations 19:00 MSK - weekly consumer inflation in Russia 21:00 MSK - Fed meeting minutes 23:10 MSK - Levi Strauss earnings
Chinese exchanges are closed due to a national holiday, so part of the Asian trading volume is absent today.
What is happening in Russia
A separate block of events is tied to the Russian market. The Finance Ministry is holding an auction for the placement of OFZ 26252. In addition, the Finance Ministry and the Central Bank plan to increase the volumes of operations with currency. For the ruble this is a separate domestic factor that will work in parallel with the global reaction to the Fed.
Which markets are in focus
The Fed minutes may primarily trigger reactions in:
- DXY;
- XAU/USD;
- S&P 500;
- Nasdaq;
- US bond yields;
- cryptocurrencies.
The publication at 21:00 MSK falls during the active part of the American session, so the reaction may be quick.
Possible scenarios
Scenario A: the minutes give the market no new signals. In that case the initial move may fade within 15-20 minutes, after which instruments return to their previous ranges.
Scenario B: the document shows strong disagreements within the Fed or a more hawkish tone than the market expected. Then widening spreads and sharp moves in the dollar, gold and stock indices are possible until the end of the American session.
Are you in a position before 21:00?
The first minutes after the publication of the minutes may produce sharp moves in DXY, gold and indices. In prop trading it is especially important here to know the program rules in advance. Somewhere it is prohibited to hold a position during the release of high-importance data, somewhere there is a restriction on entering a few minutes before and after publication, and somewhere there are no such restrictions. These conditions are best checked before buying a challenge.