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According to Danske Bank analysts, in the US, we had mixed signals from voting FOMC members ahead of the crucial Fed meeting 17-18 September.

Key Quotes

“While Bullard said the Fed should cut rates by 50bp, Rosengren (who dissented the first cut in July) said that the Fed should not ease more here and now although more easing could be necessary if the risks become more pronounced. Rosengren’s hawkish comment came even after the very weak ISM print indicating a much more severe manufacturing recession than expected.”

“US equity markets fell on the back of the numbers and Asian stocks are mixed this morning. We think the Fed is going to continue cutting by 25bp at each meeting without pre-committing to more easing unless we see a more severe impact on the US labour market.”