Waiting for the FED

“In essence, if we want to direct our lives, we must take control of our consistent actions. It’s not what we do once in a while that shapes our lives, but what we do consistently.” – Tony Robbins

Here we go with the much anticipated decision. Last meeting of the year and a key turning point as we head into 2019. Remember that the focus will be on how price reacts post the decision and press conference. It usually takes the market some time to really settle down and pick a direction so don’t be fooled by knee-jerk moves.
Clearly, today’s release is slightly out of the norm both in terms of actual implications of the decision but also due to the mounting unprecedented political pressure to stop raising rates. Base-case expectation remains for a dovish hike but we’ll be ready for whatever we get out of Powell.
In terms of recent market action, we continue to see unwinding of risk positions and as expected, rallies continue to get sold. Furthermore, as we have warned, yesterday we also saw markets selling into the usual BS headline resales from Washington when indices trade on the lows. The tape has changed and unless we see something very constructive out of the FED or the White House, chances are that we are still nowhere near the end of this de-risking / de-leveraging phase.
In today’s session we will focus on how prices tend to react on these releases and how we would look to both manage existing positions and/or initiate new ones following the announcement.
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