What is your trade for the FOMC?

Are you once bitten, twice shy, after the BOJ?

Perhaps easier trading conditions for the next central bank meeting on the menu. Certainly there's less variables in this one. It's either hike/no hike or hawkish/dovish, by variable degrees.

The main risk is if we get a hike, as next to no one is expecting that. The probability is sitting at 22% right now, which is up slightly from the 18% low we've seen in the last couple of weeks. Dec is still the circled date for a hike at 58.2%, Nov is 28.7%.

The Fed are running out of meetings to fulfill their dot plots and some members calls for 2-4 hikes this year. The longer we go through unchanged meetings, the more ansty the market is going to get about the last one in Dec.

With expectations set so low there shouldn't be too much of a move south if the Fed sit on their hands again. Depending on where we are in relation to the 100.00 level, I'm going to be watching that for a fade move. It will be quite a tight trade as I'm still worried about additional overspill from the BOJ. I'd be looking at either a tight stop under 99.80 or maybe a bit further, and just under the Aug lows around 99.50/60.

If we do get a hike then I'll switch to watching cable with a view to scaling into some longs, as I posted yesterday. It's my view that if (and when) the Fed does hike, they won't be going on a hiking spree and we'll probably have to wait another 6 months or more for another one. I doubt it will take the market that long to reach that conclusion either so fading any excessive USD strength is something I'll be looking at generally.

That's my view, what's yours? As the sands of time flow down to the FOMC, what trades are you in or going to be looking at before, over and after?

Does Aunty J have the answers?