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Hardy: Fear and loathing in the markets ahead of FOMC

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There’s only one event all markets are focused on this week and that’s Wednesday’s FOMC meeting. Even though the expectation is that the FED will raise rates, there’s great uncertainty across all asset classes explains Saxo’s John Hardy.

There is particular concern about emerging markets because of dollar and dollar-denominated borrowing. Hardy also focuses on China which caused some panic in the markets at the end of last week.

John admits it's difficult to know exactly how best to trade this week, as the market is poorly positioned. He points out that the macro trade of the year, EURUSD, has gone wrong after the European Central Bank's disappointing meeting. The risk, he says, is that the Fed roles out a dovish hike. Although he still believes in dollar strength, he's not sure when that will occur and says the FOMC statement will be key.

John also looks at levels for USDJPY, EURUSD and AUDUSD.