Fed Chair Powell managed to surprise the market somewhat during the press conference with clear guidance on an imminent start to QE tapering, but the market reaction was fairly muted, with the action overnight and in the European session today suggesting the Evergrande story is still the hobby horse of...
The bond market dismisses the FOMC’s hawkish signals
The bond market's reaction was muted amid a hawkish Federal Reserve's meeting. Investors decided to focus on shorter-term economic dynamics such as the Delta variant dismissing signals of aggressive tapering and a Fed fund rate forecast of 1.8% for 2024, much higher than the Euro Dollar market pricing. Bond yields...
XAUUSD rallies into H1 resistance; daily still weak
The left chart shows the XAUUSD daily timeframe. Price is in the bearish area, between the lower blue and lower red bands. The right chart shows the XAUUSD hourly. Here the price is rising into resistance (red shaded horizontal). We are looking to see if this is a key level...
Hawkish FOMC at the margin, but market focus elsewhere
Today we break down where the FOMC meeting - and really Fed Chair Powell's press conference more specifically - surprised modestly on the hawkish side, but why the market reaction was relatively limited as focus seems elsewhere now, especially on China's Evergrande. Still, the market bulls will have to overcome...
Market Quick Take – September 23, 2021
In the wake of a very cautious indication of Fed intentions to taper asset purchases in the new FOMC policy statement last night, Fed Chair Powell surprised on the hawkish side during his press conference. This kept a lid on the equity market rally comeback and boost the US dollar...
The German election will be bearish for the European bond market
The German election will be bearish for European sovereigns regardless of the outcome. We expect Bund yields to break above 0% under all scenarios except one. An R2G coalition would be the most bearish scenario for bonds as the new government will substantially increase fiscal spending and implement policies to...
FX Update: Bar is high for meaningful FOMC surprise with other irons in the fire.
With expectations virtually nil for strong signals from the Fed at the FOMC meeting tonight, the meeting could well surprise expectations, which have perhaps shifted slightly to the hawkish side on the potential for the Fed to move sooner rather than later on the taper. But the next steps from...
Warning shot from FedEx as margin pressure intensifies
FedEx's earnings show increased margin pressure which become a hot topic in the upcoming Q3 earnings season.As we describe in our Market Quick Take this morning, equities are rebounding on good news from PBOC and Evergrande which for now are stabilizing the situation around the Chinese housing market. But today’s...
USDJPY is approaching pivot, potential for bounce | 22 Sept 2021
USDJPY is approaching our entry at 109.705 in line with our 61.8% Fibonacci retracement and 61.8% Fibonacci extension and EMA 55. Price is expected to experience a pullback at the pivot towards our take profit at 109.116 in line with our graphical swing low support. Our bearish bias is further...
USDCHF is at pivot, potential for a bounce!
Price is approaching pivot level of 0.92445, in-line with 38.2% Fibonacci retracement and 61.8% Fibonacci extension . We could potentially expect the price to bounce towards resistance at 0.93260, in-line with 100% Fibonacci retracement and swing high resistance. Alternatively, price could drop to support at 0.91910, in-line with 61.8% Fibonacci...