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The Federal Reserve (Fed) left interest rates unchanged as planned, but Chair Jerome Powell repeated that the rate cuts will begin ‘sometime this year’ and that it would be appropriate to slow the pace of QT ‘fairly soon’. The decision was such a relief for the market; US bonds rallied, the dollar fell and the S&P500 traded at fresh record.
In Europe, mood was much less cheery, as the 11% plunge of Kering, the owner of Gucci, raised questions regarding the health of the rest of the European luxury stocks. European Central Bank (ECB) head Christine Lagarde didn’t enchant Europeans...

Yesterday’s Bank of Japan (BoJ) decision to exit the negative rates went quite smoothly for equities and bonds, relatively disquieting for the yen. The USDJPY spiked past 151.50 this morning while the EURJPY hit a fresh high despite the dovish vibes from the European Central Bank (ECB) and a hawkish move from the BoJ.
In the US, the Federal Reserve (Fed) will most probably keep the rates unchanged today, update its dot plot and maybe give a hint on whether they will start slowing QT.
The EURUSD is testing the 100-DMA to the downside before the Fed decision, while Cable...

The Bank of Japan (BoJ) scrapped its negative rate policy, raised the rates from -0.10% to 0%, ditched its YCC policy and ended the purchases of ETF and Japanese real estate investment trusts. However, the bank said that it will continue to purchase sovereign bonds with ‘broadly the same amount’ and that the policy will remain accommodative for now. The latter caught traders attention more than the rest. The yields fell and the yen weakened.
Elsewhere, the Reserve Bank of Australia (RBA) maintained rates unchanged at today’s policy meeting, as expected, and the AUDUSD fell sharply below the 200-DMA. The...

A week packed with central bank decisions starts on a mixed note after hotter-than-expected US inflation sent the US 2-year yield around 25bp higher over the week and the 10-year yield spiked past the 4.30% mark. Stocks resisted to higher yields for the major part of the week, but the mood was not brilliant on Friday. The S&P500 fell from an ATH, as equity bulls also started feeling the heat of hawkish fears before this week’s FOMC meeting and stocks in Europe were also sold off before the weekly closing bell.
The Bank of Japan (BoJ), the Reserve Bank of...

Yesterday’s mix of economic data – which pointed at higher-than-expected inflation and lower-than-expected spending in the US – finally broke the Federal Reserve (Fed) doves’ and the equity bulls’ back for at least a day. US yields and the USD jumped, equities fell.
All eyes are on next week’s FOMC meeting. The Fed will update its dot plot having seen a two-month jump in inflation, robust jobs data, a relatively strong GDP print and healthy earnings. There is a chance that we see the median forecast show no more than two rate cuts penciled in by the Fed members for...

Direction was mixed yesterday, as Tuesday’s hotter-than-expected US CPI print gave cold feet to investors regarding the Federal Reserve’s (Fed) ability to cut interest rates as soon as in June. The S&P500 and Nasdaq consolidated near record, energy stocks helped tempering losses in the S&P500 as technology stocks traded down. European stocks hit fresh record. The dollar index rebounded as the selloff in Treasuries accelerated despite a strong 30-year bond auction, the EURUSD consolidated below 1.10.
Today, focus is on the US retail sales and producer price inflation data.
In energy, the positive pressure is building after the EIA data...

Inflation in the US accelerated, not only in terms of monthly headline figure but everywhere, both core and headline, and both yearly and monthly figures came in hotter-than-expected. US yields and dollar rose, gold fell, but the S&P500 gained!
Elsewhere, sterling fell against the dollar as softer-than-expected jobs data in the UK reassured the Bank of England (BoE) doves and boosted the expectation of rate cuts this year to almost three following the data.
In Japan, all eyes are on wages negotiations as many Japanese unions disclose their pay deals with employers this week. Yen traders are closely watching the...

The week started with limited appetite in US stock and a fresh record for Bitcoin. Major US indices were flat on Monday’s trading session ahead of today’s US CPI data.
Investors are not feeling fully comfortable into today’s US inflation print, as there are several factors warning of a second blip in US disinflation that could eventually lead to a further softening in dovish Federal Reserve (Fed) expectations.
Volatility will certainly be on the menu of the day, as the Fed’s data-dependent approach results in an increased focus on inflation data. Bloomberg data shows that over the past six months,...

The US economy added 275K new nonfarm jobs last month, significantly more than around 200K new job additions penciled in by analysts. But happily, the unemployment rate unexpectedly rose to 3.9% and wages grew slower than expected on a yearly basis and were almost flat on a monthly basis. The fact that another strong NFP read didn’t translate into higher wages gave a peace of mind to investors. US yields fell and the US dollar index tumbled in the immediate aftermath of the US jobs data, the EURUSD spiked to 1.0980.
While I found that the dollar selloff was a...

Yesterday’s European Central Bank (ECB) meeting and Lagarde’s press conference went according to the plan. The ECB left its rates unchanged for the fourth straight meeting, lowered its inflation forecasts, predicted that inflation will reach the 2% target by next year and suppressed its growth forecast for this year. Still, Lagarde said that they aren’t ‘sufficiently confident’ in inflation to lower rates but that they ‘will know a little bit more in April and that they will know a lot more in June’. It was heard as ‘we will start cutting the rates in June if inflation continues to ease...