The FED held their meeting yesterday in the evening, European time, and I was planning on analyzing their statement this morning. But, all the action coming from the UK distracted me and I almost forgot the FED. Today´s round of US economic data, which was just published, reminded us that there´s life outside of the UK.

Speaking about that, the numbers were a mixed bag, with the non-farm productivity jumping 3.1% in the third quarter and the services PMI numbers remaining upbeat. Simultaneously, the unemployment claims came out 8k above the consensus and the unit labour costs were missing badly.

The services PMI number and the labor costs stand out in this report. Just like the UK service sector, at 54.8 points, we can say that the US service sector is in a very good place. The lower labor costs, on the other hand, are something to worry about. Wages did rise, but only by 0.3% which is nowhere near the 1.7% expected amount. That being said, last month's number was revised higher from 2.0% to 4.3%, so there's still a chance that today's number turns out to be better by the end of the month.

So what about the FED?

As widely expected, the FED left the interest rates unchanged, which is the reasonable thing to do just a few days before the US presidential elections. Everyone knew this so it was no surprise. What the forex market was expecting was clues and hints about the assumed December interest rate hike.

The FED altered their language in the official statement to sound a bit more hawkish. From the comments, I can tell that they acknowledged the recent pickup in the economic activity and inflation expectations, but nothing there screamed rate hike.

However, the market took the statement positively and the rate hike odds jumped to around 86% from 68% before the FED meeting. A dovish signal came from the FED member, Rosengren, who dissented it. It seems very strange because a couple weeks ago, he commented in an interview that he was strongly supporting a rate hike. Well, we´ll have to wait and hear what he has to say next.