FXStreet (Delhi) – Research Team at Scotiabank, notes that the market reaction to minutes to the October 28th FOMC meeting is fairly muted at least so far including in 2 year Treasuries, EURUSD and slightly higher equities. Key Quotes “That’s likely because the minutes read like an historical footnote before events transpired to raise market-based probabilities for a hike in December.” “As argued in our morning note, those events include: the 271k October payrolls report that posted the strongest job growth so far this year and since last December; further evidence of bottoming inflation in the October CPI report; Chair Yellen’s remark that December is a “live possibility”, and resilient markets in the face of the weekend Paris attacks.” “The minutes frame a discussion that occurred before all of this. They indicate that most FOMC members were not yet confident of the inflation outlook to commence tightening, and that it was “appropriate to wait for additional information to clarify whether the recent deceleration in the pace of progress in the labor market was transitory or reflected more persistent factors…” With November payrolls pending ahead of the December FOMC, such evidence may have been received in October’s strong job gains.” “Against that backdrop, it was made clearer — if there was any doubt — that the FOMC intentionally chose to reference the next meeting as a possible point of lift-off but not necessarily so. The language surrounding this is as follows: “Members emphasized that this change was intended to convey the sense that, while no decision had been made, it may well become appropriate to initiate the normalization process at the next meeting, provided that unanticipated shocks do not adversely affect the economic outlook and that incoming data support the expectation that labor market conditions will continue to improve and that inflation will return to the Committee’s 2 percent objective over the medium term. Members saw the updated language as leaving policy options open for the next meeting.” For more information, read our latest forex news.