A scenario of no-change to dot plot will come as a relief to risk assets. USD may ease as markets have already unwound their prior dovish bets to be aligned with the Fed’s Jun dot plot.

A case of more dovish dot plot (i.e. if the Fed looks for more cuts than what they have pencilled in) would lead to dovish re-pricing and that can weigh on USD.

A more hawkish dot plot (i.e. Fed looks for lesser cuts, dots shift higher) would lead to hawkish re-pricing. Yields can run higher, and USD can continue to trade higher. This would be a risk-off scenario for risk assets. In this scenario, alongside higher Oil prices, there will be upward pressure on inflation and yields. This may result in a deterioration of global growth/inflation mix and can cause headwinds to risk appetite and undermine Asian FX, especially those that are net oil importers, such as THB, PHP.