Jeremy Stretch Fed Quotations

People are looking ahead to the CPI data tomorrow that I think will probably continue the presumption that the Fed has still got a little way to go with hiking.

We're still going to get Japanese rates at zero for some time yet. The Fed continues to underpin the view that more rate hikes are highly probable, and yield premiums favor the dollar in the short term.

The Fed is going to hike more than the market is anticipating. A crossover would inevitably put more pressure on the pound.

The U.S economy is continuing to grow strongly and so there's plenty of justification for the Fed to keep raising rates. The dollar's pre-eminence is going to be maintained against the yen and the euro.

The U.S. economy is still powering ahead and that keeps the market firmly focused on the fact that the Fed has further to go. With yield spreads widening out again the dollar can keep rallying.

Cable (sterling/dollar) could go lower in the first half of the year as we think the Fed will continue to hike rates, but in the second half we might see a recovery in sterling.