NY Open: The lull before the..... lull
FX Trader, Loonieviews.net
Summary: FX markets are largely treading water ahead of reaction by the Fed chair to the latest batch of US GDP numbers. Still, nobody expects Jay Powell to veer off course and stir them from their slumber.
FX markets are becalmed. This morning’s second reading of US Q3 GDP, at 3.5%, was unchanged from the “advanced” reading a month ago, leaving markets directionless and patiently awaiting Fed Chair Jerome Powell’s remarks, scheduled for 17:00 GMT.
FX traders appear to believe that Powell will not deviate from November 14 remarks where he expressed happiness about the state of the US economy, saying that markets will have to get used to the idea that the central bank could raise rates at any time starting in 2019.
The US dollar has recorded modest gains against the major G-10 currencies since the New York open. EURUSD is probing support at 1.1270 which if broken will lead to 1.1210 and then 1.1115. A break above 1.1290 would lead back to 1.1340.
Wall Street appears less concerned about a hawkish Jerome Powell and more focused on prospects for positive news on the trade front. Various media outlets are suggesting that President Trump and President Jinping will reach a compromise at their weekend meeting and avoid an escalation of the trade war. The three major indices are modestly higher in early trading but unlikely to rally much further until after Powell’s speech.
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.