So then, the Fed hasn’t done much to take a bite out of the out of control spending of recent years which is putting up $1 trillion US dollars every 100 days. In the Fed’s defense they can’t order the government to stop spending like it just inherited a diamond mine. There are people who want to put on the breaks but that is against the rules of the current regime.
There is one trick they might have left before the effects start to really hit the economy in bad ways. There is something called a “hail Mary” in US football where you have seconds left on the clock and just throw it 40 yards into the end zone hoping something magical happens.
What do you think they might do?
GBPUSD 4 HOUR CHART –UK Election Looms
Key levels are pretty clear at 1.2612 and 1.2710, the former holding after a run at it earlier.
The key focus is on Thursday’s UK elections, where an outright win by Labour would be seen as a positive if only because it would have a ruling majority. We should have a feel for pre-election positioning by tomorrow at the latest.
only sharp deterioration
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(Reuters) – The United States, France and major economies are unlikely to halt the rises in their debt levels in the next few years, credit rating firm S&P Global warned on Tuesday. … .. …
“We estimate that –for the U.S., Italy, and France– the primary balance would have to improve by more than 2% of GDP cumulatively for their debt to stabilize; this is unlikely to happen over the next three years,” S&P said in a report.
“In our view, only a sharp deterioration of borrowing conditions could persuade G7 governments to implement more resolute budgetary consolidation at the present stage in their electoral cycles”
EURUSD 1 HOUR CHART – GAP FILLED
Having filled its opening week gap, EURUSD focus is on whether it stays aboive 1.07.
Why? Yesterday EURUSD broke a 6 day pattern pivoting 1.07, which is a bullish indicator as long as this level does not trade again.
To deflect the focus from 1.07, 1.0750 needs to trade again, currently blocked by 1.0743.
Fior today, how markets react to news will give a clue.
Powell speaking in Portugal (13:30 GNT)
JOLTS report (14:00 GMT)
A look at the day ahead in U.S. and global markets from Mike Dolan
Further signs of a cooling U.S. economy greet the second half of 2024, with politics dominating headlines on both sides of the Atlantic and Federal Reserve boss Jerome Powell due to speak later on Tuesday.
Morning Bid: Growth ebbs, curves steepen, Powell in Portugal
USDX 4 HOUR CHART – GAP FILLED
With the opening week gap filled, the key 106.17 high is back on the radar (while it trades above 105.83).
In this case, it seems more of a matter of general USD strength rather than USDX acting as a EURUSD proxy (57.6% of the index).
Now that the EURUSD gap has been filled, it would probably need to see 1.07 trade again for the USDX 106.17 level to be seriously challenged.
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