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In our Wednesday special report previewing the Fed policy decision, we highlighted the fact that the extent of the pricing in of scaled back Fed cuts had been so extreme that the balance of risk heading into the decision had been leaning towards a reaction of US Dollar selling and risk on flow. read report
US economic data continues to come in on the stronger side and market rate odds for a June cut at the Fed have dipped below 60%, which is the lowest June odds print for the year. The currency market has responded as one would expect, with the US Dollar well in demand across the board. read report
The week is set to close out and the big takeaway is that the market continues to see what it wants to see, despite actual signs that would argue otherwise. Key standouts on Friday’s calendar come from the monthly employment report out of the US, US factory orders, and Michigan sentiment. read report
As the new week and new year gets going, we’re seeing a wave of profit taking kick in. This shouldn’t come as any surprise after the US Dollar had been aggressively sold and US equities aggressively bid in December. read report
Indeed, the Fed Chair would not rule out additional rate hikes while also dismissing calls for rate cuts. And yet, through all of that, there was still an underlying takeaway for the market that the decision leaned more to the dovish side. read report
In recent sessions, we’ve been hearing Fed speakers leaning more to the dovish side. At the same time, US economic data has been less than impressive. All of this has helped to drive a reversal of flow resulting in lower US yields, a broad-based US Dollar sell-off, and surge in US equities. read report
