Bank of America anticipates diverging monetary policy paths between the Reserve Bank of Australia (RBA) and the Swiss National Bank (SNB) after their respective June meetings, with the RBA seen as one of the last major central banks to cut interest rates.
The Wall Street bank's view was reinforced by robust Australian labor market data, suggesting potential for...
RBA decision: Will the Aussie Dollar break out?
A potentially interesting week awaits the Aussie dollar, with the Reserve Bank of Australia (RBA) expected to hold its interest rate unchanged. Money markets price around a 97% chance for rates to remain at the current level and only a 3% probability of a 25-basis point cut.
Last week, ANZ became the first of...
NZDUSD – Technical Overview
The overall pressure remains on the downside, with the market stalling on attempts to move up into the 0.6500 area. However, there are indications that the market may be attempting to establish a longer-term base. To alleviate medium-term downward pressure and support this prospect, a break back above 0.6500 is necessary. A monthly...
The European Central Bank (ECB) initiated its cutting cycle last week on June 6. Expectations are that ECB policymakers are in no hurry to follow this first cut with a second one.
Next week, we will see how much of a hurry the Bank of England (BOE) is to follow the ECB.
A Reuters poll of 65 economists indicates the BOE is likely to wait until August to cut...
Japan's wholesale inflation surged in May at the fastest annual rate in nine months, data revealed yesterday, indicating that a weak yen may be exerting upward pressure on prices by increasing the cost of raw material imports. Producer prices in Japan rose 2.4% year-on-year in May 2024, up from 1.1% in April, surpassing market expectations of a 2% rise.
This...
A high number of European Central Bank (ECB) officials are making public speeches in the 24 before the Fed rate decision this week Wednesday that could help or hinder the EUR/USD.
Also, thrown in the mix now is French President Emmanuel Macron’s decision to call for a snap local election after the results of the EU Parliament elections, adding to market...
The U.S. Federal Reserve is anticipated to maintain the federal funds target range at 5.25%-5.5% when officials conclude their two-day meeting on Wednesday. Investors will be scrutinizing the statement to learn when the central bank might eventually reduce its rate and the potential frequency of such cuts this year.
Market expectations suggest a possible rate...
The US federal Reserve is not the only major central bank making an interest rate decision this week. So too, will the nonconformist Bank of Japan (BOJ).
In its April policy meeting, the BOJ highlighted upside risks to inflation and indicated readiness to adjust monetary policy, if necessary, although it expects to maintain its current policy for the time being....
While closely related, US inflation and the Federal Reserve's interest rate decisions can impact the market with varying intensity. The Fed aims to avoid surprising the market, whereas inflation is unpredictable. Consequently, the market is confident that the Fed will neither hike nor cut rates at the upcoming meeting. However, inflation forecasts are often...
Given the increasing likelihood that the ECB will cut rates before the Fed, further EUR/USD depreciation could be anticipated in the coming days/ weeks. A move below the 100-day moving average would have traders looking toward the 200-day moving average of 1.0853.
However, weaker jobs data from the US this week is tempering this expectation, which means some...
Trump and Hunter Biden Trials
Former U.S. President Donald Trump was convicted last week on all counts of falsifying business records. Trump faces sentencing in one month’s time on July 11. Each of the 34 felony counts could result in up to four years in prison, although first-time offenders (or ex-presidents) like Trump are rarely incarcerated.
Meanwhile, a...
Dollar Watch: JOLTs, ADP, NFP
It's US jobs week. Which gives us at least three trading opportunities, scattered out nicely over the whole week.
First is the JOLTs Job Openings report.
Second is the ADP Employment Change report.
Finally, we have the Nonfarm Payrolls (NFP) report.
Let's look at what happened last month:
Nonfarm payrolls increased by...
Key factors for EUR/GBP trade next week
With a European Central Bank (ECB) decision due next week, a trade in the GBP/EUR could be of interest. Presently, the EUR/GBP is trading at the lowest rate since August of 2022.
The divergence in monetary policy between the ECB and the Bank of England (BOE) is what could be driving this weakness in the EUR. E ECB...
USD/CNH: BofA’s Caution, JPM’s Warnings
Bank of America (BofA) has expressed caution about betting against the US dollar in the face of recent improvements in sentiment towards China's economic policy stimulus. Recent policy actions by China have sparked optimism, leading to a weakening of the USD. However, BofA advises against making hasty financial moves based...
Can Oil soar on June 2 OPEC+ cut hopes?
WTI crude futures and Brent continue to recover from three-month lows. The rebound is potentially driven by expectations that OPEC+ will extend its output cuts of 2.2 million barrels per day into the second half of the year during its June 2 meeting.
Additional support for crude prices came from the start of the U.S....
We have another eventful week ahead with numerous Federal Reserve officials scheduled to speak publicly. Anecdotally, I seem to recall Mester and Kashkari are two of the most impactful speakers, and this week provides an excellent opportunity to see if this holds true. Kashkari recently left The Federal Open Market Committee (FOMC), so his impact might be lessened...
On Friday, alongside the US PCE data release, Canada will publish its Q1 GDP growth figures. Earlier in the week, Canada will also release its producer prices data. Note that US markets will be closed on Monday for Memorial Day.
According to the Royal Bank of Canada, the Canadian economy likely grew more quickly in Q1 2024 based on headline figures. However,...
The Federal Reserve’s preferred inflation gauge, US Core PCE (Personal Consumption Expenditure) Price Index MoM, is released at the end of the coming week. This means some USD trades could present themselves.
But first, a quick recap on why the Core PCE Price Index matters and why it is the Fed’s preferred gauge:
Unlike the more familiar Consumer Price Index...
