NOT MUCH MEAT - There wasn't a whole lot to take away from Wednesday's Fed Minutes and overall, the market reacted accordingly. I suppose the key takeaway is that the Fed direction is data dependent. The Fed is committed to moving in the direction it has been, towards a rate hike, but isn't going to get overly aggressive in getting to that point. There is still a lot of caution in the Fed's tone, but there is also a continued sense that slowly but surely there is a shift going on towards the hawkish side. So what does this mean for the market? Well, not sure there is too much we can take away from this in determining the next key move.
DATA DEPENDENT - I don't think we should see any meaningful shift away from buying US Dollars, and any pullbacks in the Buck (which are entirely possible), should also be very well supported. Thursday's US inflation data comes into focus, and with inflation being a key variable in the Fed's equation, this could be a series of data which opens a lot more volatility than Wednesday's Minutes did. Anything on the hotter side of expectation should open some more broad US Dollar buying, while a softer print will expose the US Dollar to some profit taking. Elsewhere, a referendum on the Swiss gold vote shows the balance well in favor of the "No" vote, which means the SNB would not have to increase its gold reserves.
WHERE'S THE SNB? - This had been something that many were worried would open a breakdown below the 1.2000 EURCHF barrier, in that increasing gold reserves would mean less ammunition for the SNB to intervene. Still, interestingly enough, despite the poll, EURCHF wasn't able to hold onto a rally on Wednesday and traded right back down into the 1.2010 area. We are terribly close to the 1.2000 floor and yet nothing from the SNB just yet. I suppose they have orders in right at the figure. Let's see. Finally, no signs of any reversal in the stock market, with the SPX500 still comfortably just off record highs. But keep an eye on the SPX500 and USDJPY and be on the lookout for a sharp reversal over the coming sessions. I am already short some USDJPY and will be looking for follow through.