The day has finally arrived for the Federal Reserve Open Market Committee (FOMC) to reconvene for its September meeting on monetary policy.The rate decision announcement is due at 20:00 CEST followed by a press conference at 20:30 CEST. We continue to believe the Federal Reserve will not raise the federal funds target range today or later this year. The recent string of weak US macroeconomic key figures supports this view. The markets have only priced in around a 10% probability of a hike in September and around a 50% probability of a hike in December. If rates are kept unchanged, the focus of the market is likely to turn swiftly to the projection for the federal funds rate.
The oil market will focus on the release of the US oil inventory data from the US Energy Information Administration (EIA) today. The American Petroleum Institute (API) said yesterday that inventories declined 7.5mb last week. Hence, the oil market is likely to be positioned for the numbers to show a draw today.
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