Important news for the day
- Fri, 23rd, 14:30 CET US Core retail sales.
- Fri, 23rd, 16:00 CET US Fed Powell speech.
Fed moves
According to some economists traders might overplay the role of the Fed in terms of a set of aggressive rate cuts towards the end of the year. Before the US election the Central bank might rather stay calm and not act sharply. The treasury market currently prices in a 75% chance of a 25 basis points rate cut in September and a 25% chance of a cut of 50 basis points. It seems more realistic that towards year end a maximum reduction of 75 basis points might follow.
Market talk
After a slight positive momentum in the Dollar the recent weakness in the Greenback has returned. No major levels have been broken so it looks like that the recent sentiment will continue. On the other hand news events might trigger some further strength in the Greenback. Some input in this case might follow from Jerome Powell, who is expected to speak at Jackson Hole today. Also yesterday’s unemployment claims from the US came in just as expected but were seemingly a trigger for the Dollar strength.
Tendencies in the markets
- Equities sideways, USD potentially stronger, cryptos positive, oil supported, metals sideways, JPY stronger.
