Author: FX

There is a nice afternoon turn in risk sentiment unfolding. The S&P 500 is now up 33 points to 5771 after falling as low as 5666. That’s a +100 turn in the index from the lows at noon ET.I didn’t see anything particularly notable from Powell as he remained in a ‘wait-and-see’ mode. If anything, he didn’t sound overly worried about rising inflation expectations or tariff inflation. Still, pricing for a rate cut in May has come down today to 36% from as high as 60% earlier in the week and close to 50% yesterday.Yields are rising with US 2s…

AI imageThere is a bit of a carrot-and-stick approach from the White House on Russian sanction today. Trump tweeted about raising Russian sanctions in order to get peace but now Reuters reports that they’re examining removing existing sanctions as an incentive to reach a deal.The report says the White House has asked the Treasury to expore options for easing energy sanctions ahead of expected talks in Saudi Arabia in the coming weeks. The report also says the Treasury is studying how removing Russian sanctions could change global oil trading patterns.I would expect this headline to weigh on oil, and it’s…

The Dow Jones dipped to fresh lows before rebounding after NFP data print. The US added less jobs than expected in February while unemployment ticked higher. Previous wages, unemployment, and NFP net job gains were all revised lower. The Dow Jones Industrial Average (DJIA) struggled on Friday, falling to a fresh seven-week low below 42,200 before staging a mild recovery to the 42, 800 region. The Dow Jones is still sharply lower on the week, falling 2.6% from Monday’s opening bids as trade war concerns weigh on investor sentiment, as well as middling data prints that hint at cracks developing…

Federal Reserve (Fed) Board of Governors member Adriana Kugler hit newswires with cautionary comments on Friday that whiplash trade policies could do a lot of damage, including pinning inflation at a persistently higher level. Key highlights It is possible that we’ll see more persistent inflation due to policies. I am paying a lot of attention to inflation expectations. I don’t expect government job cuts to show up suddenly. I am watching very closely for any sudden job market changes. Wage gain moderation has helped lower inflation. I am not that worried about small uptick in unemployment rate. The February jobs…

US President Donald Trump took time out of his Oval Office address to deliver new information about impending tariffs on Canada. While addressing the press in the White House, President Trump lobbed a fresh tariff threat, which may or may not come today, or on Monday, or on Tuesday.  The statement comes less than 24 hours after the Trump administration temporarily waived tariffs on all USMCA-associated goods, and the reaffirmation that reciprocal tariffs will happen in April also appears to have fallen by the wayside. Key highlights Canada has tremendously high tariffs on lumber. We will shrink the government and…

USD/MXN retreats as US trade policies overshadow economic data. Mexico’s inflation beats forecasts, but Banxico still expected to cut rates on March 27. USMCA four-week exemptions are secured, but tariffs on steel and aluminum remain in place. US Dollar weakens despite solid NFP; markets price in 80 bps of Fed cuts in 2025. The Mexican Peso (MXN) registers modest gains against the US Dollar (USD) and remains unable to reach a new weekly high, as the exotic pair seems to have found a floor near 20.22. A mildly hot inflation report in Mexico and solid US Nonfarm Payrolls (NFP) figures…

Federal Reserve (Fed) Chair Jerome Powell stuck to his cautious guns on Friday, warning that policy uncertainty makes it difficult for the Fed to enact policy adjustments. Key highlights Uncertainty around Trump Administration policies and their economic effects remains high. Most longer-term inflation expectations remain stable, consistent with 2% goal. Net effect of trade, immigration, fiscal, and regulation policy is what matters for the economy anf monetary policy. Fed policy is not on preset course. We can maintain policy restraint for longer if inflation progress stalls or ease if labor market unexpectedly weakens or inflation falls more than expected. Labor…

Federal Reserve Governor Adriana Kugler indicated that rising inflation risks provided a strong argument for keeping interest rates steady for an extended period. Key Quotes Sees steady monetary policy ‘for some time’ on recent inflation data.  Strongly supported steady rate policy at January FOMC.  Future Fed policy changes will be driven by data.  There are important upside risks to inflation.  Flags big rise in some inflation expectations readings.  Inflation has been moving sideways for a while.  Job market has substantially rebalanced.  Wages are not a key driver of inflation pressures. Source link

The S&P 500 and NASDAQ are both down nearly 1% on the day, hitting new session lows. The NASDAQ has dropped -196.47 points (-1.09%) to 17,872, The S&P 500 is down -53.5 points (-0.94%) at 5,685.The S&P 500 is now pulling further away from its 200-day moving average at 5,732.70, signaling growing downside momentum. Meanwhile, the NASDAQ is on track to close below its 50-week moving average for the first time since March 2023, adding to technical concerns.This marks the third consecutive weekly decline for the NASDAQ after falling -2.51% two weeks ago and -3.47% last week. Currently, the index…

Federal Reserve Governor Michelle Bowman, regarded as one of the bank’s most hawkish policymakers, indicated that she might place greater emphasis on labour market indicators when considering future policy decisions. Key Quotes Labor market, economic activity will become a larger factor in US central bank policy discussions going forward. Shocks, structural changes since Covid-19 pandemic may have masked transmission of Fed policy to the economy. Source link