Low activity is expected today in most of the main European stock exchanges, as it is a holiday in some countries in the region for All Saints’ Day. Therefore, the attention of investors is focused on the other side of the Atlantic, where two important meetings are held: the Federal Open Market Committee (FOMC) of the Federal Reserve (Fed), and the US Treasury, which will reveal the debt plan of this for the last quarter of the year.
“The likelihood that the US central bank will raise its key interest rates at this meeting almost zeromainly because the disinflationary process is already running and, and this is an important factor,” said Link Securities experts.
In his opinion, the question is whether the Fed is completely done with the hikes or whether, on the contrary, there is still some movement before the end of the year. “We are convinced that neither the statement published by the FOMC at the end of its meeting nor its president, Jerome Powell, in the next press conference, will not give clues on this issue. What’s more, we believe that the intention of the Fed in This meeting is to ‘talk’ to the markets that it is still possible that new increases in official rates will occur. This ‘threat’, if it happens, has the main objective of avoiding the relaxation of long-term bond yields “, they emphasized.
An important event for the markets will also be the announcement that the US Treasury will make about its financing program for the fourth quarter, which will mean the size of the auctions that it will make and the combination of the duration of the debt it will be released. .
“Last Monday the Treasury announced that it will auction 776,000 million dollars of debt in the last quarter of the year, somewhat lower than the first estimate (76,000 million dollars less). The FOMC ‘does and does as’, because of its ability to affect the behavior of bond markets,” explained Link Securities.