Daily Market Color July 28, 2016Despite a Slightly More Hawkish FOMC Statement, Markets Believe Fed Rate-Hiking Delays Will Persist The Fed statement and post-meeting press conference served as the financial market highlight yesterday. The sentence added “Near-term risks to the economic outlook have diminished” was taken as a clear acknowledgement/recognition of the firming US economic conditions, although the market reaction made it clear that the collective expectation of Fed rate tightening remains skeptical near term. US rates fell 5 basis points from pre-announcement levels yesterday afternoon, while stocks sold off in the late afternoon as well. On the international front, the latest data on Eurozone economic confidence was released overnight, which unexpectedly showed an increase in July – indicating the Brexit impact for European productivity may be somewhat muted. The Japanese currency and equity markets also continued to rally on hopes of a positive impact of newly announced stimulus efforts. US Treasurys and swap rates are currently flat to 1 bp lower vs. yesterday’s close. The dollar is trading mixed against other major currencies. Commodity prices are 1-3% lower across the board, with the exception of NYMEX Natural Gas, which is trading up sharply (8%) off the back of much lower than expected inventory adds – the lowest recorded levels for this time of year in the last 10 years.