Part of what is keeping Dx buoyed is apprehension in stocks ahead of the FED. The conviction is lukewarm in dollar though, hence a bit of two-way motion including other markets-wide components. It is important to remember a lot of pricing in has already transpired but there are also ongoing global transactions taking place in import/export and the like so this is fluid.
Wsj’s timiraos is trying a last pro – kick at 50 pt cut in this morn’s edition claiming that 50 bps is not reserved for “severe” condition
only at 2pm will we be able to see the strenght of his “whispering”
with market significantly pricing odds of 50 pointer, I got me some popcorn to see if the FED plies to these plaeyrs
Worth noting USDJPY touched 142 but went no farther (last 141.72)
GBP getting some flows after inflation data… EURGBP extending its low (last .8409)
Otherwise it is a wait and see until Fed time, USD is a touch softer
Bond yields a touch higher
Stocks holding up
But a new ball game after the Fed decision
Until then, market bets are still for a 50bps rate cut, not sure if it is based on hope, prayer or a stronger conviction.
FOMC
Besides the size of the rate cut and accompanying statement, keep an eye on the dot plot.
What is the dot plot?
The Federal Reserve’s (Fed) dot plot is a chart that shows the projections of the Federal Open Market Committee (FOMC) members for the federal funds rate. The dot plot is published quarterly, and is a tool used to help the public understand the Fed’s thinking on interest rates and the economy.(AI Overview)
A look at the day ahead in U.S. and global markets from Mike Dolan
There’s little left to say about the dominant event of the day – other than how to game markets’ reaction to the size of the Federal Reserve’s interest rate cut later and what Fed policymakers project over the horizon.
Few, if any, doubt the first Fed easing of the cycle is now at hand. Wall Street’s S&P500 (.SPX), opens new tab hit a new intra-day record on Tuesday ahead of the decision – lapping up the prospect of lower borrowing costs even as the economy picks up some steam. Stock futures held firm overnight into the big decision.
Morning Bid: Flirting with records as Fed rates finally fade
USDJPY 4 HOUR CHART – WAITING FOR THE FOMC
Whatever “real money” flow that drove USDJPY higher yesterday seems to have run its course for now after a stall below 142.50.
This leaves the focus on the pivotal 142 level as the current bias setter in a market that is on hold now waiting for the FOMC decision.
Intra-day range so far 141.22-142.46 (124 pips) vs an 18 pip range for the EURUSD
As we wait for the Fed to make its widely anticipated interest rate decision, this is one that could go either way. The debate is not whether the Fed will cut rates but by how much.
As any trader knows, it is the reaction to news (e.g. economic reports, monetary policy decisions0 that counts. This is where the saying Buy the rumor, sell the fact comes from. It also reminds me of the old trading adage, It is the reaction to news, more than the news itself that matters.
Nasdaq – NDX
Nasdaq composite: Once again, it’s make-or-break for breadth
Dow futures up slightly, S&P 500 slip, Nasdaq 100 off ~0.5%
Sep NY Fed Manufacturing index 11.5 vs -4.75 estimate
Euro STOXX 600 index off ~0.1%
Dollar down; bitcoin off ~2; gold edges up; crude up >1%
U.S. 10-Year Treasury yield ~flat at ~3.66%
NASDAQ COMPOSITE: ONCE AGAIN, IT’S MAKE-OR-BREAK FOR BREADTH The Nasdaq composite IXIC is still down more than 5% from its record highs. That said, the tech-laden index is on a five day win streak, and just posted its biggest weekly rise since early-November 2023.
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