405887 September 19, 2024 07:00 Forexlive Latest News Market News
South Korea’s finance minister Choi Sang-mok
—
Lower Fed rates are a welcome development for reducing pressure on the KRW at least. USD/KRW chart:
This article was written by Eamonn Sheridan at www.forexlive.com.
405886 September 19, 2024 06:00 Forexlive Latest News Market News
The bill was to fund the government for 6 months. Its failed. There are 12 days until the government shuts down.
Reuters:
This article was written by Eamonn Sheridan at www.forexlive.com.
405885 September 19, 2024 06:00 Forexlive Latest News Market News
New Zealand economic growth data for the April to June quarter of 2024
NZD/USD is around 0.6219, not a lot of change on this result.
–
New Zealand’s economy
contracted in Q2
The Reserve Bank
of New Zealand had forecast the economy contracted by 0.5%.
This article was written by Eamonn Sheridan at www.forexlive.com.
405884 September 19, 2024 04:39 Forexlive Latest News Market News
The jobs market report for August is due today from the Australian Bureau of Statistics:
As you’ll see in the screenshot below, the previous month’s report, July, showed another huge gain in jobs, carrying on the trend of strong employment growth over the past year. Note also that the unemployment rate, and participation, both rose. Particiaption is at a record high.
Expectations are for a more subdued gain in employment, stable participation and stable unemployment.
The RBA has a twin mandate, in summary its stable inflation (the target band is 2 – 3%) and full employment. The RBA is endeavouring to not lose too many of the employment gains its seen and to drive inflation lower at the same time. Upcoming developments on inflation are expected to be encouraging, as I posted yesterday:
This article was written by Eamonn Sheridan at www.forexlive.com.
405883 September 19, 2024 04:14 Forexlive Latest News Market News
China took action against nine U.S. military-affiliated companies on Wednesday in response to U.S. arms sales to Taiwan, freezing their assets within China.
This move is the latest effort to increase pressure on the United States to cease its weapons sales to the island.
Organisations and individuals within China are prohibited from engaging in transactions with the firms.
Info via Reuters, there is a little more info at the link.
Mainland China’s Communist Party rulers assert the right to rule Taiwan. The people of Taiwan currently enjoy democracy and self-determination. Hence the conflict.
This article was written by Eamonn Sheridan at www.forexlive.com.
405882 September 19, 2024 03:45 Forexlive Latest News Market News
The Federal Reserve Bank started the easing cycle with a cut of 50 basis points. The Fed “recalibrated” the policy stance away from when inflation was high and employment low. The baseline is now inflation is steady, and the employment is not as low. The Fed wants to get the rate down. It wants to take some of the restrictiveness out, BUT the economy is not falling out of bed.
With two meetings to go, the Fed still sees 2 more cuts of 25 basis points. Is that 25 and 25 basis points in November and December or is it nothing and 50 basis points in December. The market still sees 125 basis points in 2024 (inclusive of the 50 bps today) while the Fed only 100 basis points.
Looking at comments, bucketing the comments into topics looks like this:
Here are Fed Chair Powell’s comments organized by topics:
Economy
Interest Rates and Inflation
Summary: Still hedges against inflation and that will keep the declines in rates measured. The neutral or perhaps terminal rate is anyone’s guess.
Labor Market
Housing
Monetary Policy
Summary:All is on the table except raise rates going forward. No preset roadmap despite the dot plot I guess.
General Commentary
The next meeting is not until after the November election. That perhaps may have been the main reason for 50 bps now. Between now and November 7 there will be:
The market reaction in the forex was for the USD to move lower. However, as the commentary continued, and technical targets could not be reached, the flow of funds started to whittle away at the dollars declines. By day’s end, the greenback was surpassed by the CAD as the weakest of the major currencies, and although the USD is lower, it is more near unchanged on the day vs the EUR, JPY, CHF, CAD and AUD (changes of 0.2% to 0.11%). The dollar was lower by 0.30% vs the GBP and the NZD. What we know for sure, is the dollar whipped traders around. The GBP and the NZD are ending as the strongest currencies today.
US stocks also whipped around with gains being erased by the close and the major indices closing lower on the day.
Looking at the US debt market the 2 and 5 year are near midpoint levels on the day, while the longer 10 and 30 year are near the highs. All points on the curve are higher despite the cut in rates:
In other markets:
This article was written by Greg Michalowski at www.forexlive.com.
405881 September 19, 2024 03:14 Forexlive Latest News Market News
New Zealand economc growth data leads off the calendar. Another contraction for the economy is expected. I posted earlier in the week in the view from NZ Treasury:
Australian labour market data follows. I’ll have more to come on this separately.
This article was written by Eamonn Sheridan at www.forexlive.com.
405880 September 19, 2024 03:14 Forexlive Latest News Market News
Good morning, afternoon and evening all. Any charts, technical analysis, trade ideas, thoughts, views, ForexLive traders would like to share and discuss with fellow ForexLive traders, please do so:
This article was written by Eamonn Sheridan at www.forexlive.com.
405879 September 19, 2024 03:14 Forexlive Latest News Market News
The Fed delivered a big cut but it was a case of ‘sell the fact’ as equities couldn’t keep the winning streak going.
I think at the end of the day, you have a ‘Fed put’ now and that wins out but we could see a squeeze tomorrow.
The big problem coming into the decision was that stocks were riding a 7-day rally and right up against the all-time highs. As I noted, that’s a tough hand to deal the FOMC.
This article was written by Adam Button at www.forexlive.com.
405878 September 19, 2024 02:39 Forexlive Latest News Market News
We’ve seen this one before.
You can game out the Fed decision as much as possible but the market loves to punish both sides of the trade. That’s exactly what we’re getting at the moment as the US dollar recoups all its FOMC losses, and in some cases more than that.
I think the bond market captures some of the worry. US 10-year yields are now up 6 basis points on the day to 3.69%. Some of that came before the decision but yields are still higher in the aftermath.
I believe the thinking there is something I warned about before the Fed: The idea that by cutting more now, the Fed won’t have to cut as much later, leaving the terminal rate higher. That’s also something you could argue is bullish for the US dollar.
It comes back to what Powell said at the start of the press conference: They want to preserve the strength of the economy. If the Fed is successful in that, it’s ultimately good for the US dollar and means we won’t return to the era of 1-2% Fed funds and instead will be in a +2% regime. I don’t think that’s the case in Europe or many other G10 currencies.
That said, I don’t think this debate is over. At the end of the day, 50 bps is still 50 bps and the Fed could very well be behind the curve, particularly if the US fiscal picture tightens next year.
Increasingly, the best trade on Fed day is to wait for the dust to settle because these kinds of whipsaws are increasingly common. When I look out to next September, the Fed funds market is pricing in 189 bps in additional easing which is basically the same as the 187 bps before the decision.
This article was written by Adam Button at www.forexlive.com.
405877 September 19, 2024 02:14 Forexlive Latest News Market News
The price of crude oil is trading lower as the Fed Powell is conference continues.
The settlement price came in at $69.88, and the current price is trading at $69.35.
The low for the day reached $68.61. The high for the day was at $70.28.
This article was written by Greg Michalowski at www.forexlive.com.
405876 September 19, 2024 01:39 Forexlive Latest News Market News
Everything has aligned for gold in the past six months with Chinese investors looking for something new, Russia diversifying and the Fed getting on top of inflation. Eyes are on $2600 now but it’s all blue skies from a technical perspective now.
This article was written by Adam Button at www.forexlive.com.