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Last week’s dot plots suggest rates will move higher, with the terminal rate adjusted upwards from 4.6% to 5.10%. The Fed chair’s tone during the media conference was hawkish. Risk markets were less than impressed. They sold off heavily for the rest of the week. The market thinks that Fed policy is too aggressive.
USOil started the week with a three-day relief rally on demand optimism, but slides since yesterday after the Fed pointed to more rate hikes ahead
The Bank of England slowed the pace of hikes with an 0.5% adjustment, in a three-way split decision and hinted at more tightening, but guidance is vague
The US Federal Reserve moderated the pace of rate increases, with a 50 bps move on Wednesday, but now expects rates to peak higher and Chair Powell delivered a hawkish message
The market is anticipating that the current hiking cycle is reaching its peak, with the risk-on sentiment more prevalent since the beginning of October. This is not surprising given the forward-looking nature of the markets.
In this week's podcast, FXCM senior market specialists, Russ and Nik, discuss the aggressive hike by the RBNZ despite other banks signalling a slowdown in pace. In addition, the two also talk about oil demand out of China and give their opinion on the Fed's minutes. In addition, this Thursday will see the preferred measure of inflation - core PCE - released, and Friday is NFP Friday. Listen to these…
The United Kingdom was in the spotlight this week, with a series of economic data and the government’s budget, but the pair had limited reaction
The pair had one of its best days of the year on Wednesday as a result of the soft inflation figures from the US and extends its gains today, past key tech levels
The Fed and BoE both hike by 75 bps but their tonality contrast with each other. RBA shows conservativeness, with central bank signs of slowing down in some regions. NFP leads to an odd market reaction and critical inflation data this Thursday. Into this mix, we also have the US mid-terms. All this and more.
The commodity opened the new week on the back foot amidst trade worries and China’s commitment to the zero-Covid policy
The central bank raised rated by 75 basis points, its largest move in thirty-three years, but softened its language as it expects prolonged recession
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