 All right, good afternoon, ladies and gentlemen, to the October Analyst Debates session with me, Michael Hueson and my colleague, Collins Zizinski, in Canada. Once again, as of last month, we are going to be previewing this evening's FOMC Federal Reserve rate announcement and looking at what to expect with respect to tonight's meeting. Before I get started, I have to display the obligatory risk warning before we get started for all the regions, not only UK, but also Ireland and Canada as well, and once we've got that out of the way, we can now get started. So, slightly different, I think we've got a slightly different expectation today than we did six weeks ago, haven't we, Colin, because I think there was a little bit of uncertainty as to whether or not the Fed would actually keep rates unchanged. I think there was an expectation that the Fed might increase interest rates. There's no such expectation today, and I think most people are focusing on the December meeting now as opposed to this meeting, and I think most of the attention is going to be focused on what the Fed says in its statement rather than on what it does, and I think that's being reflected to a certain extent in some of the price action that we're seeing this afternoon and over the last day or so in the wake of last week's sharp rise in equity markets that we saw on the back of the easing by the People's Bank of China and the potential for further easing from the European Central Bank, though we are now getting some ECB policy makers reining back expectations about a move in December after Mr. Draghi's comments in Malta last week, and I think that certainly makes the currencies that much more interesting, but I also think it makes it that much more difficult for the Federal Reserve to raise rates at a time when the two other biggest central banks in the world are moving in the opposite direction. What we'll also be doing today as well as previewing the FOMC is we'll have a look at obviously what the Swedish National Bank did this morning in easing policy further even though it didn't cut rates, it did expand its QE program, and Colin will go into some detail about that. We'll also be looking ahead to the RBNZ rate announcement later tonight and the Bank of Japan announcement later this week, but for here and now let's look at the market reaction in the wake of what happened at the end of last week, and in this context I think it's probably a good idea to start with equity markets Colin, do you think? Sure, let's start with the indices and let's look at the reactions to a few of these things over the last couple of weeks, so if you want to bring us in let's me start with the S&P because we're getting a mix here and I think what we want to be looking at is that the reaction to the news that we get in addition to itself is quite significant and the reason for that is going back to the last Fed meeting, a lot of people had expected the Fed would either raise rates or they would signal that they were about to raise rates or what we'll call the hawkish hold, that they would raise rates sometime this year. What we ended up with was a dovish hold mostly because in the dot plot we had one member who is most likely Kosher Lakota who said that no, I think rates should go down and should go negative and that kind of threw a big monkey wrench into the whole thing and the Fed's been trying to backpedal for the last six weeks and it's kind of all ended up clear as mud, so what we're really seeing with the Fed is today this is their chance to do a do-over and get a rate this time and make things a little bit more clear. Are they still leaning towards raising rates in December or are they looking at holding off until next year? Today there's absolutely no way the Fed's going to raise interest rates. The reason for that is that we've got a budget crisis going on in the U.S. they hit their debt ceiling next week which means the U.S. government's about to run out of money. There's no way the Fed's going to run that raise interest rates when the U.S. government's about to run out of money. Now it looks as though they've got to deal with that and push that crisis off till after the election and into 2017 but it hasn't passed yet so the Fed's kind of stuck. There's no way they can do anything today except signal what they might do in December. What we've got to watch for in December is the deadline from the last budget stop measure is December 11th which is just a few days before the December Fed meeting and that could be the time where they're heading for another budget showdown, possibility of the government shutdown over the holiday season. Again, it's still, even that is iffy on factors that go outside of the economy and are more politically driven. Going back to all of this, when we had the dovish hold come out of the Fed, the stock market went down. Historically, when we've gotten any kind of dovish comments out of central banks, stock markets have gone up and whatever currency it was has gone down. This time the stock markets went down. The reason was because the streets saw it as a negative signal. They went, well, hold on a minute. If you were getting ready to raise rates and now you're not, what's wrong? What does that mean for corporate earnings, resource demand, the economy and so on. That was the reaction to the last Fed meeting when they went dovish. Last week the ECB went dovish and stock markets took off. People were still seeing that as a good thing for Europe. Then we got the PBOC rate cuts which were seen as positive in Europe and North America but by the time the weekend rolled through, Chinese markets actually went down. People weren't as enthusiastic about it in Asia Pacific. To make a long story short, we probably will get a fairly significant reaction to the news but it may not necessarily be the one people would think we've been getting based on how the markets have reacted the last four years. There's a change going on. I think that's borne out. I think the reaction in equity markets, certainly in the context of the declines that we've seen and subsequent bounce back in the S&P 500 is notable for the fact that the S&P 500 and the Dow have both recovered above their long-term 200-day moving averages. That's borne out by this chart here. This was the August lows. I think it's also quite interesting that these August lows also coincide with the lows in crude oil at exactly the same point in time. We'll look at that later because since those lows in August and the crude oil lows, equity markets predominantly have traded in lock step with crude oil until we got this move higher on Thursday where we got a strong move higher in the S&P, the DAX and the FTSE 100, we didn't get a strong move higher in oil. Now maybe that's a delayed reaction. We've certainly seen a significant sell-off in oil. Yeah, we're getting a bounce back today. Now, is that on the back of a weaker dollar? Is that in expectation of a dovish Fed going into the December meeting? The biggest question I think is, will the Fed deliver or will the Fed keep a December rate rise on the table given what we've seen thus far? I think that really is the big question and I think the statement is going to be key in that regard, notwithstanding the fact, we've now got some very clear divisions between policymakers on the FOMC. How will the statement handle those divisions? And I think in that context this meeting could be very or the statement could be very important in determining whether or not the Fed hikes or holds in December. My preference is still for a hold into the end of the year with a hike potentially in the first or second part of 2016. Collins I don't think is quite ready to hang up his hike boots quite yet but I think the odds of it happening are diminishing pretty much by the day and that's borne out by this particular chart or this particular chart that I'm looking at here with respect to the Fed funds. The Fed funds rate assign a 4% probability of a move in the Fed funds rate today. In December they only assign a 34.7% probability of a hike. That's up from yesterday where it's 32.8 but basically what it's saying is that the market's not expecting a hike today and if the Fed does hike today then I think they'll blow any credibility that they have left with respect to how they've guided the market and it certainly I think would blow their forward guidance credentials right out of the window because they certainly haven't guided the market to expect a rate rise today. But what's interesting here and I think this is borne out by the fact that we've seen a strong rebound in US markets on an expectation of a much more dovish Fed going forward into 2016. You contrast that with what we've seen in the DAX. Yes we've seen a similar sort of rally but look at the rally look at the contrast this was the move that we saw on Thursday, Friday and this is a Monday, Tuesday, Wednesday today. So over the course of the last two days that was the ECB that was the People's Bank of China and look where we've rebounded off. We've rebounded off the 50% retracement of the entire down move from the all-time highs to the lows that we saw at the end of September and the lows that we saw here as well. These are the August lows which also coincide with the S&P lows. It's a similar sort of story with respect to the UK 100. Again a similar sort of rebound slightly different shape and format. Also it's slightly less aggressive in terms of the move simply because of the heavy weighting that commodity stocks have in this particular index but this 6450 level on the UK 100 is a big, big level on a Fibonacci retracement level. So we can see that not only is the S&P above the 200 day moving average as is the Dow but also the DAX and the UK 100 are at the 50% retracement levels from the lows that we saw earlier this year and it's quite noticeable the fact that even though the DAX managed to match the lows that we saw in August in September the FTSE 100 didn't. Now let's look at crude oil prices and look for the correlations there because this afternoon's moving crude has been quite interesting and this is something that I think Colin you'd probably like to expand on quite nicely because I think if we look at this WTI chart here we did break out yesterday but we weren't able to follow through below that 4290 level that I talked about in my video on Tuesday. And look at that you had a false break you've got an oversold on the stochastics and now you're getting the big big positive reversal you've got it we're now up to a 6% gain on on WTI 5% gain on on Brent so we're tying our and on our plan it's 5.4% and 4.4% so big big big update for a crude oil here part of which I think is is is a catch-up rally we're seeing that we did get a the the inventory decline in the US wasn't all that big but it didn't go up as it didn't go up huge again but we also had an uptick in implied demand and that's what I've been keeping an eye on because the the recent weakness in the crude oil price had been following implied demand down now that it's ticking up we're starting to see crude oil go up and that's something that's really important I think we got to watch for with crude in particular is that it's been trading off of demand I mean people you know sometimes crude trades off supply and people get worried about supply disruptions in the Middle East and things like that the storing crude oil trading is demand driven right now as the supplies people have seen they're starting to come down in the US and in what have you but it's really about demand what did we see last week with the with the ECB and the PBOC when they when they went dovish crude oil went down because people went again oh my gosh their economies must be weak that's really bad for crude oil demand and then went oil today I think we're getting quite a certainly some encouragement on demand out of the US and a bit of a catch-up pop I think things have gotten it have gone down straight down for several straight days here and I think we're getting a relief rally but but overall when we look at crude it looks like it's bottoming out and and it started to consolidate at a at a higher level we got to the channel bottom was about 43 4290 as Michael said and we're having a nice bounce off that that is actually a good sign of support we're also getting some support in the equity markets and something that I was watching as as Michael was cycling through the the last group of charts is that the other thing to note is that we are getting a nice seasonal upturn here in stocks where we're coming out of the weakest time of the year for stocks and and we've seen double bottoms now we've had a double bottom between the end of August or the middle of August and the end of September early October depending on the market nice double bottom bases being put into place we're starting to climb out of those and if we go to the the hang saying I believe it's actually a triple bottom so the other thing we are seeing is that some of the fears that had driven the markets way down in August have started to to subside a little bit as well some of the bearishness and there we've got basically what looks like a triple bottom in the hang saying double bottom for the markets in other regions well actually I mean I can just basically draw a nice line through that we've broken out of that so it looks as if we're probably going to head up towards the 200 day moving average on that particular chart it's very easy to project the double bottom break out here the the base hasn't exactly matched but again we've got the lows in the 24th of August we've got the break higher you just basically project the distance between these two points here up from the breakout point which should give you a target roughly I think of probably round about where the 200 day moving average is right now now what I would be concerned about here is this is potentially a bearish candle and I am a little bit concerned about that in the short term so we could in the short term drift back towards this trend line support here it was resistance it's now support support and resistance run lines do have a tendency to reverse their functions once they break out I think we've certainly seen that born out in this particular context here we broke higher we've come back we've retested the previous highs and then we've gone higher again so we are in a bit of an uptrend here but this negative candle here does give me a little bit of a pause for thought in in the context of what you were talking about earlier with respect to the weak reaction of Chinese markets to the announcement of fresh stimulus and I think that's why we saw a red candle there that red candle there which which which which occurred on the Monday so so for me I think we we are a risk of a little bit of a pullback there I I wouldn't expect the pullback to exceed this particular line here but if it does then then the prospect of a move back to the lows is very much on the cards but certainly in from from what we've seen thus far 22,300 is going to be a key support level if if in fact we do drift back to that level so so that's the hang saying we've talked about that um we do we can do gold I was just about to move on to that one other thing that has prompted a little bit of a move higher is is gold now maybe there's an expectation here that we are going to get a dovish fed certainly does beg the question we did break the 200 day moving average very very briefly and middle in the middle of October we are now coming to the end of October we are potentially going to be posting a very bullish month not only for gold but also for equity prices and I think that also bodes well for a move higher in gold prices and if that happens that then doesn't tie in with a hawkish fed because we all know that tied to US monetary policy generally doesn't have a particularly positive effect on the gold price and um that's certainly something that we do need to bear in mind when we start thinking about where gold goes to next where I think by and large on a seasonal basis gold prices tend to do fairly well in the fourth quarter yes we're definitely moving into a seasonally favorable period for gold gold usually bottoms out for the year mid to late summer and then it usually peaks for the year sometime between January and and April and I think it's important here to note that with the Fed it's not in gold and the US dollar is it's not just about whether they when they raise rates but also the path of afterwards if we go back to the beginning of this year the market was not just expecting that the Fed would start raising interest rates in same March they were expecting that that this would be the beginning of a series of interest rate increases like we saw the last time where the Fed when they started raising rates they raised rates every meeting for like 12 meetings and and they just kept on going and and as the year has progressed not only have they delayed the launch but the number of potential rate hikes has decreased as well and to the point where now it's probably whenever they do do it they're probably going to do one and then bend over backward and say okay that's going to be it for a while so they're going to be when they do launch they'll probably be one and done maybe two and done max we're not looking at a series of rate hikes taking them back up to to two percent we're looking at maybe getting a year from now maybe if we're maybe they'll get to one percent we'll see right and and so because of that the US dollar though even by March had priced in a an immediate like by March that they would start raising rates in March and that they would go on a campaign of several rate hikes and and so really the US dollar has gotten quite ahead of itself relative to relative to other currencies based on and relative what the Fed is actually has done and is and is likely going to do so because of that we're seeing that even if they did signal that they're going to raise rates once it doesn't necessarily mean that's the end of the line for this gold recovery because the US dollar still likely overvalued and likely to come down and and then the which enable is enabling the price of gold to to rebound as well you know and I think that's that's another thing I think we've already seen significant tightening effect from the value of the dollar over the course of the last few since the beginning of the year the dollar's gone up quite significantly and I think that more than anything rather than anything the Fed's done has tightened monetary conditions in the US and I think that that can be that can be borne out by some of the economic data that we've seen over the course of the past few months and I think if you actually look at the the some spread I've done some spreadsheets here durable goods always we hear an awful lot about how well the US economy is doing yet thus far durable goods core durable goods that's stripping out aircraft and all of large items like that declined 2.2% and this week's numbers as well as the lower revision to the August numbers points to a US consumer that doesn't really have the appetite to make large scale purposes purchases even and Whirlpool's profit warning I think highlights that very narrative Whirlpool one of the biggest white good producers in the US issued a profits warning last week so you know new home sales fell quite sharply non-farm payrolls are now starting to trend down and we are you know we will Walmart cut their forecast Walmart cut their forecast look at the payrolls numbers for the last two months here we've got 142 for September we've got 136 for August that's a sharp fall from the numbers that we were seeing in the middle of the summer 223 245 260 and you had a theory on that didn't you Colin there's the sharp fall in the payrolls numbers was predicated on an expectation the Fed would raise rates and they didn't that's right because I went back and looked at 2004 when the Fed started raising rates and those were the kind of numbers they were running 250s to 350s and then when they actually raised rates in 2004 jobless claims sorry payrolls plunged to like 50,000 and stayed there for two or three months and then started tracking back upward again and the with that those payrolls numbers look to me like Main Street was fully expecting the Fed to raise interest rates in September reacted accordingly and then of course now now it's all it's all out the window because the Fed didn't raise rates so now what do we do and that's another thing generally speaking I think that even though we're not seeing an infant funds and Wall Street hasn't priced in a Fed rate hike I think Main Street certainly has nice as Michael said it's it's born out in the economic data the way the U.S. economy has been acting this year you think the Fed it raised rates three times March, June and and September the way that the the economic numbers have been going so this the signaling effect appears to have had a big impact on the Main Street economy as it is so in some ways you might think the Fed might be better off just doing the the one cut and telling everybody we're done then then leaving the uncertainty keep overhanging the the market it's it's a funny one there's a lot of Michael and I have had great debates on this all year and the reason is because there's there's so much conflicting data out there and and speakers and everything else that you that everybody can take analysis and do really strong analysis and come up with widely varying results and it's it's it's beyond just the that's what makes the market too there's just a lot of conflicting conflicting data and information out there and because of that one of the things we are likely to see when the Fed news comes out is probably and we've seen it in in past past announcements as well is we'll probably get a fairly sizable move in both directions whatever whatever it goes first we'll probably see a reversal then we'll see a reversal again and I suspect it'll we'll probably get quite a bit of choppiness and volatility off of the announcement so and because I found it when I'm writing up the insights that that often when I start writing the insights that one minute after the news comes out by 10 minutes after the news comes out things have completely changed and I've got to go back and revise it so so be be where be note that when we when the news does come out we're likely to see some fairly strong moves in both directions as people try to sort out what it actually means so basically with respect to the dollar this is the dollar index over the past two years and as you can see from October 2014 to round about where we are now you can see how high the dollar has come from in terms of its trade weighted index so it's still around about 12% up on the year already even though it's well down from the peaks that we saw in March but look at that line that I've drawn through the peaks in the dollar index for March we're run but we're rubbing right up against them so certainly in the context of where we've been since March we've been trending sideways but with progressively lower peaks and that's and you know that's no better illustrated with respect to the euro dollar chart that I've got here which I've drawn through the lows there we've got euro dollar now we saw the strong down move from Draghi's comments on Thursday and then the bank of Japan sort of bank people's bank of China on Friday since then we've seen a little bit of a sideways consolidation big question is now is this a flag for a move lower towards 10820 which is really my line in the sand for the euro to not go any lower at the moment we've found a good deal of support through there and the May lows the July lows you know could this be a little bit of a flag before another move lower towards these lows here and a rebound you know it's pretty difficult to say because you've got two central banks pulling and pushing against each other at the moment and really while Draghi has said that the ECB is prepared to consider more QE considering more QE and actually doing it the two totally different things so we're going to you're going to have to make do with an awful lot more what I would call central bank speak between now and December with respect to where euro dollars going to go but certainly in the context of this particular move I don't expect euro dollars to go much below these lows that we've seen over the past two to three months I think we're range bound and I think as long as the dollar index remains above that key resistance level that will continue to be the case it's a slightly different story with respect to cable this here again we are similar sort of trend line April lows 145.65 drawn through the lows there brings us in around about 152 so again if we get a particularly hawkish fed or a hawkish interpretation initially then this 152 level should act to support for a rebound but on the flip side of that we have got resistance coming in helps if I actually draw it through the right peak we have got resistance coming in from the august highs coming in through there at around about 154.50 so again the momentum is pointing to the downside maybe we could drift lower a little bit but overall I still expect these may lows around about 150.90 to continue to hold any downside impound in the sterling unless something fundamental changes in the outlook for the cable particularly against the dollar we're just going to talk about dolly in because I think that more than anything is probably at a greater risk of a breakout simply because of the compression that we're seeing not only in the Ichimoku charts but also in the Bollinger band charts and I'm going to draw that one on separately and I'll let Colin talk about that while I construct the fresh chart for that particular chart certainly so what we've seen here and as I've talked about the U.S. dollar peaking we're seeing that relative to the yen here we have a we had with the U.S. dollar index it kind of had a double top back in March and April against the yen it had the double top in June and August and it has started to work its way back downward anyways and it's been going sideways basically for the last six weeks there's been a lot of confusion or not confusion but uncertainty and indecisiveness around dollar yen because people are wondering well what is the Bank of Japan going to do the ECB has come out and said okay well we're thinking about ramping up QE and people have been speculating well what will the Bank of Japan do with their QQE program will they ramp it up or will they keep it the same so the last two meetings they've held but this October meeting which is Thursday night here and Friday morning in Japan is the big one that people have been focusing on the October will they ramp it up or won't they and Japanese data has been soft if you listen to Kuroda he hasn't sounded overly enthusiastic about raising QE I think the Bank of Japan's their data is soft but at the same time I think they'd rather have the government step up more than them step up more but we'll see if the government's not going to step up more then maybe they need to step up more and what are they going to do related to the fact that the number of the other central banks are still firmly in easing mode particularly the PBOC for them and so that would really is a coin toss for me I think it could go either way but when it does and Michael will tell you why the dollar yen will probably explode in one direction or the other this is the thing with dollar yen I think by the moment you've got a potentially hawkish Fed and a potentially dovish Bank of Japan and I think the expectation is that we could potentially go higher on the other hand I'm not of that opinion I think the dollar for the moment is heavily overbought I think there's still a expectation the Fed will raise rates sometime within the next three to six months I think that expectation is wildly overstated because I'm struggling to see where they're going to get the consensus for a rate rise and I'm going to draw you to some comments I made in my morning note this morning and I think this really comes into the context of the statement the statement was in the last statement in September there was a line that said the risks to the outlook for economic activity and the labor market are nearly balanced now that is clearly not the case now on the back of two week payrolls report so the key question for me is will they soften that language in a way that reflects the concerns of the Fed governor and permanent voting member Leil Brained who is a permanent voting member she doesn't rotate on or rotate off and whose views are shared by another permanent voting member Daniel Terulo who made similar comments that economic risks are tilted to the downside if there's any reference to risks being tilted to the downside I think it's very unlikely that the Fed will move in December or January or January for that matter and that brings me into further downside pressure to inflation because this week we have US GDP numbers but we also have the employment cost index on Friday keep an eye on that because that's a reflection of salary and wage increases the expectations are that's going to increase by 0.6% from 0.2% I would be surprised if we get an increase of that magnitude but furthermore I think inflationary pressures within the within the US are probably a little still very much lagging and that's pretty much borne out in this gasoline chart because if you look at what crude oil prices and gasoline prices have done over the past 12 months we can see that throughout 2014 we saw crude prices WTI this is the purple line move pretty much in lockstep with gasoline prices now you would have thought that given the fact that you need to drive pretty much anywhere in the US to actually do anything that there would have been a significant fiscal boost to spending patterns from amongst US consumers we haven't seen that and in 2015 we got a strong rebound in crude prices but the gasoline prices actually pushed well away pushed much much higher much more quickly and I think that actually acted as a little bit of a break on the US economy not only in Q1 but also in Q2 but no now that that divergence that we've seen between gasoline prices and crude prices has now closed up again and the fact is we've seen a significant drop in gasoline prices and yet we've still seen well we've still not seen any sign whatsoever that US consumers feel constrained to loosen their purse strings that tells me that there's still some disinflation in the pipeline because these sorts of things will lag over the course of the next two or three months maybe even the next three to six months and as such I think it means that the Fed's language tonight in the statement will be just as important as market expectations Yes and so not just with related to the economy and employment but also with regards to inflation and also other markets because one of the reasons why the Fed held off back in September was because we were just coming out of that huge bout of volatility we had seen in China where the markets had exploded up in the spring and then crash in the summer and the Fed looked like we're trying to put some distance between that and their decision and make sure that the dust settled which it did as we've seen on the charts but at the same time we still want to see well what are they going to say about the PBOC's been cutting the ECB might cut the Rick's Bank raise their Kiwi and so on that it'll be interesting to see what they have to say about that as well and I see you've brought up the Kiwi dollar chart so maybe we can I can talk to them as well if you'd like You can yeah carry on Mike because obviously the Kiwi report tonight as well and the FOMC and the RBNZ maybe there's some lessons for the Fed and what the RBNZ did in 2014 I'll let you tell them about that Absolutely so in 2014 the RBNZ had reloaded and actually had raised rates they raised rates four times for a total of one percent they went from two and a half to three and a half percent and this was similar to what other central banks had done previously the Bank of Canada back in 2010 had gone from half a percent to one percent that reloaded them so that when the oil market crashed they were able to give those two hikes back and that's what the RBNZ has been doing this year as well they've been giving these hikes back so that big decline we've seen in the Kiwi dollar this year was them cutting rates and talking the dollar down now interestingly enough they've so they've now given back three of the four cuts my feeling had been that they would give back all four amazingly enough the three consensus is that they're going to hold this time New Zealand data has basically stabilized but I'm not convinced that their economy has stabilized I wouldn't be surprised if they actually did cut one more time and on top of that the other thing to watch for is in their statement is if they start taking shots at the dollar again because it has come up over the last few weeks is as expectations of the fourth rate cut have gone away the Kiwi dollar has been on the rebound and in the past they not only have they tried to talk their dollar down but they're one central bank that actually does intervene in forex markets if it gets too far ahead on them they've done that a couple of times in recent years so watch for their statement as well because they could start taking pot shots at their dollar I wouldn't be I would have a hard time seeing how the dollars they're going to is already leveled off and we're seeing lower peaks on the stochastics I mean I have a hard time seeing how they're going to let it let a full blown hawkish hawkish reed come through when their economy still struggling and let the Kiwi dollar appreciate much further from here whether they do it with a rate cut whether they do it through signaling in their statement or whether they just rate try and talk down the dollar but I do suspect we could see them trying to knock it back down in that in some way shape or form so because of that we do of course get a lot of action in the Kiwi dollar off of their their announcements so don't be surprised if we get that again so that is at 4 o'clock PM Eastern time that is 8 o'clock PM in London and 9 a.m. in Auckland so it's two hours after the Fed decision we get the RBNZ and especially with milk prices being as weak as they are the last thing they want is a strong currency exactly absolutely okay so that's the RBNZ look at where the key support level is and there's around about 66.95 66.95 figure so 66.95 67 so that could be a key support level on any move on the RBNZ or alternatively on what the Fed might do so you may have a dovish Fed which pushes the Kiwi back up to 68 and then suddenly the RBNZ comes in cuts rates and it comes all the way back down again so that's fair to say if the Fed goes dovish they'd be under pressure to do same to go dovish okay so that's the RBNZ and I think the Rix Bank yes let's talk about it let's finish with the Rix Bank let's finish with the Rix Bank there's a definite theme here Colin it's in there easing monetary policy does the Fed really want to be the outlier here well that's an interesting thing because the question I've been asking myself is that we've been having central banks have been in easing mode all year and that's why I think the Fed signal at this one will be interesting because I've been wondering are we is this continuing or are we getting to the point of maximum stimulus and are we getting to the point where we're perhaps getting towards the end of this this easing cycle and it'll be interesting to see what happens with the Fed because the next Fed meeting is a couple of weeks after the ECB meeting the Bank of Canada meeting the Bank of England and a few others meet just before that and I'm wondering if we do get a hawkish hold from the Fed that that could be like a last call you know if you're going to ease do it now before we start going back the other way we'll see what happens or does the Fed stay on the same trend as everybody else and just kind of stay off in in devilish territory so this is why the the statements particularly significant so let me go back and talk about Sweden for a minute so Sweden is running negative interest rates and there had been a lot of talk over the last while that well maybe they'll they'll go they'll go deeper because they're a negative point three five Swiss are and and Danes are at negative point seven five so and and they did say that they they do have more room to go down but they did not cut interest rates today instead they raised QE and and you think with the central bank raising QE that was that their currency would go down instead this the Swedish corona goes up and in quite substantially it's actually the top performing currency among the majors today so what's going on well it seems to me as though probably the street had expected them to go even more dovish and cut interest rates again the other thing that was interesting was that they actually were with one central bank that actually said they're starting to see signs of of inflation starting to pick up again which seems a little early relative to to what we're seeing in commodity markets but nonetheless it seems as though perhaps they weren't quite as dovish as people had been hoping or that if if inflation does start bouncing back that that perhaps maybe they won't be quite as as similar in the future and we're seeing the Swedish corona go back the other way I just find it really intriguing when markets don't react the way that you think they're going to always twigs my attention and as we start doing more digging and asking why and certainly the Canadian dollars also experiencing a little bit of a rebound today probably on the back of that rally in oil prices but it's interesting though but it's interesting the Kiwi and the Aussie have slumped quite sharply which does seem rather counterintuitive which leads me to finish with the Canadian dollar because I'm sure you want to talk about that because we haven't actually talked about that today have we and no we haven't and it's been quite an interesting week for the Canadian dollar after our the the election results from last week that ended with a majority government that was very well received by the street that for two reasons first of all having a majority means that they have the mandate the Liberals have the mandate to proceed with what policies they have and we avoid the risk like we were running a risk of a three-way hung parliament and a minority government mess and so that all got cleared out and most importantly for the street also the the NDP who are the Canadian equivalent of the Labor Party got absolutely trounced they lost half their seats and they had been talking about ripping up the Trans-Pacific Trade Partnership so and of course we know markets don't respond well to people that like to rip up trade deals so them them getting knocked back into obscurity was a good was also seen as a positive by the market so that helped the Looney to come down our US dollar had to come down it basically had been backing up since that was on the weakness we'd seen in crude oil prices over the last week but now the crude oil is starting to bounce back the Looney is as well okay so keeping on that daily candle depending on where that closes this evening could determine the future direction of the Canadian dollar at the moment we've got a bearish engulfing day but the day is not yet over so you know I always wait for confirmation from candlestick patterns like that and you should do the same so really I think we're probably going to wrap this up now ladies and gentlemen just to conclude this FOMC preview the key things I think that we need to watch out for obviously look at the statement look for any sort of change in the language look at any references to the labor market because in this last statement the Fed did refer to an improving labor market with solid job gains you can't really say that's the case now because since then we've had a poor September number as well as a downward revision to the August number more importantly will the committee keep the line the risks to the outlook for economic activity and the labor market are nearly balanced or will they soften the language and are they still concerned about international developments so that for me I think already the key factors that we need to focus on will the Fed keep the option of a December rate rise on the table or will they push it out into the 2016 and basically I think reinforce the point of data dependency yes and of course on top of that will also be the reaction as to this and how will the market how would the markets react to a dovish Fed the markets reacted negatively to a dovish Fed in September they reacted positively to a dovish ECB last week how would the markets going to react to anything I mean the US dollar has been acting as you would expect any dovish news the dollar goes down hawkish news the dollar goes up but we're at a tipping point for stocks where we've seen sometimes they take it positively sometimes they take it negatively and we could see both happen within 10-15 minutes of the announcement so we're likely also to see some fairly significant swings before things settle out which means tread lightly indeed okay well ladies and gentlemen that's it for this month Colin I would like to thank you for your time is there any if you have any questions now is the time to ask them otherwise we will finish up this webinar and we will then post it on YouTube for you guys to listen back to at your own convenience okay so no questions all right well thanks for your time ladies and gentlemen and we'll probably do another one of these just prior to the December meeting a similar sort of format look at expectations and what have you so hopefully you'll join us both then yes and also we're going to have our regular monthly non-farm payrolls webinar will be next Friday at it's around one one fifteen 15 p.m. London UK time yeah so so you can go back to 8 15 p.m. here in in North America so please feel free to join us for that one so that's one fifteen next Friday for non-farm payrolls because maybe that could give us further indications as to what the Fed might do as well all right thanks very much guys and have a good day training