FOMC keeps language unchanged but raises Fed funds forecast

•     FOMC keeps language unchanged but raises Fed funds forecast

–    Fed kept the “considerable time” phrase, Yellen’s comments were not so hawkish

–    Market focused on Fed funds forecast: Median forecast for 2015 rose 25 bps, 2016 rose 38 bps

–    Yellen also accepted ECB’s attempts to raise inflation, which will weaken EUR

–    USD rose against every currency we track

•     ECB to offer its first targeted long-term refinancing operation today

–    Banks can bid for up to EUR 400bn of cheap funding

–    Not likely to have a big immediate impact on EUR

•     Scotland referendum today!

–    All polls show “no” winning, betting is heavily in favor of “no” winning

–    Polls close at 2200 local time, exit polls will start coming out after that

–    Market is positioned for a “no” – expect some relief rally, but not that big. “Yes” would probably be a huge shock

•     Today:

–    Norway: Norges Bank meeting

–    US: housing starts for August, Phili Fed index, intial jobless claims