FOMC should communicate patience in deciding future policy moves - TD Securities

"We expect the Fed to cut rates by 25bp, delivering the third consecutive cut since July," TD Securities analysts said previewing Wednesday Federal Open Market Committee (FOMC) meeting.

Key quotes

"The FOMC should communicate patience in deciding future policy moves as they assess the impact of the three cuts they have already delivered. We look for the Fed to temporarily pause before resuming rate cuts in Q1 2020."

"Rates: A Fed ease in October should comfort a market that is pricing in 92% odds of a 25bp cut. However, a lack of commitment to ease further may be a disappointment. We hold on to our 5s30s flatteners and remain strategically long 10s."

"FX: USD firmer as markets calibrate to a more patient Fed. USD flags tactically cheap by our metrics. EURUSD bears brunt of the move as USDJPY temporarily flirts with 200dma break ahead of a patient BOJ."