Daily digest market movers: US Dollar rises mildly, investors still anticipate aggressive Fed easing
- Market expectations for aggressive Fed easing have increased ahead of Wednesday's FOMC decision.
- Most analysts anticipate a 25-basis-point cut, but a handful predict a larger 50-basis-point cut.
- The market is pricing in a 65% chance of a 50 bps cut and 250 bps of easing over the next 12 months.
- The market's aggressive rate path expectations are unlikely to be validated by the updated Dot Plot.
- Risks of a dovish surprise from the Fed remain, but not all members are expected to support such a move.
- On the data front, according to the US Census Bureau's report on Tuesday, Retail Sales in the US grew by 0.1% in August, reaching $710.8 billion.
- This followed a 1.1% rise in July and surpassed market predictions, which had anticipated a 0.2% decline. However, excluding automobile sales, Retail Sales increased by 0.1%, falling short of the expected 0.2% growth.
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