Powell

The USD bullish rally continued to rage after Powell bluntly said that the Fed may not be in a hurry to cut rates, citing a strong labour market and a "remarkably strong" economy.

Dow Jones Forecast: With renewed market optimism across indices, cryptocurrencies, and the US dollar following Trump’s win, the Dow Jones is hitting record highs, prompting analysis of potential upcoming resistance levels and the sustainability of this bullish momentum.

Crude Oil Outlook: As we enter the week, the US Dollar Index has retraced back to its December 2023 lows following a dovish stance from the Fed, while crude oil is once again testing the boundaries of its primary consolidation zone. The key question remains: Will crude oil rebound or break through these levels?

Momentum finally turned lower on Wall Street after two Fed members forced traders to question their increasingly dovish positioning, ahead of Jerome Powell’s speech at Jackson Hole. USD/JPY may have already seen the swing low I've been seeking this week.

Flash PMIs are the notable economic data releases nest week, although the headline event will be Jerome Powell’s speech at the annual Jackson Hole symposium. It will allow him to hammer home the Fed’s stance on Friday, and therefore likely to take precedence over the FOMC minutes released two days prior. Canada’s inflation report is key for BOC watchers, who continue to make their cash rate decision on a ‘per meeting’ basis.

Traders will keep a close eye on the outcome of the second round of the French elections at the Asian open next week, as it could have a direct impact on European markets. Given that the far right failed to secure a majority government, there are upside risks for the euro if they do not perform as well as currently expected. Jerome Powell will also address the Senate Banking Committee ahead of a key inflation report next week. Both events have the potential to shape policy expectations for 2025. NZ dollar traders should closely monitor the RBNZ meeting to see if they maintain the hawkish stance that surprised markets in their prior meeting.

Why might the Fed cut rates in July? Inflation is running below the Fed’s target with timely measures of shelter inflation, jobless claims are ticking up, monetary policy is tight per the Taylor Rule, and the election is looming.

US dollar traders will be watching Fed Chairman Powell’s press conference and any decisions about the central bank’s balance sheet runoff as potential market-movers for the US Dollar Index (DXY)

Gold is poised for a potential breakout around the Fed meeting after spending the last 4 weeks consolidating in a tight $50 range.

The Fed has toned down its statement to give it flexibility to pause the interest rate hiking cycle in May depending on incoming economic data

Gold prices put in a strong bounce last week to create a bullish engulfing pattern. Half-way through the following week and that formation is almost nullified already.

According to the CME’s FedWatch tool, investors are now pricing in a 60/40 shot of a 50bps rate hike in two weeks’ time and that rates could peak above 5.5%.

Market mostly traded in tight ranges ahead of Jerome Powell’s highly anticipated testimony to the House, which has the potential to be a volatile event.

Some officials and Fed watchers have suggested a 50 basis-point move should be on the table if inflation fails to slow...

One sure thing is that Powell is not the uber hawk he once was and there won’t be any surprise 75bps hikes coming down the line.

Futures markets now tally with many Fed policymakers for the first time this year, accepting the Fed's 'terminal rate' will be above 5%...

Futures point to a mixed start as investors look ahead to a keenly awaited speech by Fed Chair Powell. Biden's State of the Union address is also due later.