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Fed’s Clarida is crossing the wires and has said that decisions are taken at one meeting at a time, but has warned of a worsening economic backdrop on the global scale.

Key comments

  • US economic data since July has come in pretty well.
  • Not seeing an elevated risk of recession.
  • Treasury yields are driven down by global issues.
  • The Fed is focused on its congressional mandate.
  • See US growth  in 2020  at or above trend.

FX implications:

Coupled with the latest trade war developments, things do not look very bright for risk appetite going forward and the Yen, CHF and gold likely to stay under demand. We are waiting for Trump to kick back at the Chinese following Chinese tariff announcements.  

  • DJIA heavily in the red after Trump says U.S. companies must look for ‘alternative to China’