I’ll offer my 2 cents (overvalued at that).
Treasury QRA less than expected maybe provokes some USD demand. But maybe they’re lying too. So maybe doesn’t provoke. Increasing threat of escalation in the Middle East? Maybe sees flight into USD.
Fed? Maybe more likely than not they eases off the inflation mantra and start to set market up for limited cuts -> USD negative to some degree.
NFP? who knows. At the end of the day I’m of the mindset its a made up number.
That it’s frolicking around the 200 day fools game levels maybe is no accident in the land of the non-committed….
EURUSD
The pair is trying to turn Up , as the FOMC is approaching this week.
Resistances are at 1.08400 and important one at 1.08850 – break of would open the way for attack at 1.11000
Immediate support comes at 1.08250/300 and needs to hold for any reasonable attack of the resistances.
Major support comes at 1.07350
Buying EUR intraday is a way to go – and always watch for that 1.08250/300…if goes bellow, count on 100 pips lower easily.
Inflation and interest rates drive the markets
The market probability on a ECB rate cut by April has risen to around 100%.
Out overnight, January UK BRC shop price index fell to a 2-year low of 2.9% y/y vs 4.3% in December.
Key focus is on the FOMC decision tomorrow and to what extent, if any, the Fed pushes back on market rate cut expectations.
10-yr 4.068%
–
WSJ – A Little Dual Easing Soon Could Help the Fed Avoid Major Easing Later
Federal Reserve policymakers are considering when to start cutting rates, when to slow down the pace of quantitative tightening – By Justin Lahart, Jan. 29, 2024
Treasury
Treasury Announces Marketable Borrowing Estimates | U.S. Department of the Treasury
4 hours ago
Bloomberg.com
US Treasury Cuts Quarterly Borrowing Estimate to $760 Billion
4 hours ago
Reuters
US Treasury to borrow $760 billion in Q1, lower than October forecast
people can also do equities and wait for low priced bond markets too. it just depends on what they wanna do as bond markets got something for everyone.
Gotta love the CB’s (FED, RBI) problem is can’t decide which one to love more. =)
toddlers feed both parents with all the fruits but when they get a tub of ice cream they say nooo!! ice cream is bad!!! and eat the whole thing!!
January 29, 2024 at 7:35 pm #947
Why don’t they like big badanna companies?
If fed decides to cut rates then nows the time to go into equities as a matter of fact the next theme for me is equities, and whoever bought bonds/papers and kept at it from 2022 onwards till now has more than enough capital to finance their possies, they got the 1% of equity they need from bonds… That 1% rule originated from the time of low priced bond markets of the 70’s-80’s.
And like I said before the american markets are mirroring indian markets from 2022-2023 onwards, only for a longer period of time… First a DCB then launching into rocket mode but those will be few and scattered throughout then back into bond rallies with even more astronomical rates. Since murricans don’t like 5.75% as I have forecasted last year then 11-13% is acheivable over a period of time provided bonds keep on dropping then jumping which will get them closer and closer to those levels but in order to do that it’s safer to get into some equities and let the bonds cook on the back burner for some more time. It’ll take time but bond buyers will get the rates they want whether it is 5% or 11% or even 1%…
If they don’t want low bond rates then it is better to not buy them at all.
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