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HotForex

Weekly Review: Aussie, Kiwi and Sterling

8 Mins Read HotForex

Last week was dominated by volatility as the RBA, FED and BOE gave the markets something to think about. Accelerating global price pressures following the pandemic have left central bankers with the tough tradeoffs between inflation and growth, as each dynamic has debilitating consequences for global economies, and policymakers are trying to walk a fine line between the two. The FOMC is prioritizing the inflation fight as the strength in the labor market suggests little chance of a sustained US downturn. The RBA hiked rates more than expected, the Fed took a possible 75 bps hike off the table and…

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HotForex

Mastercard: Will Fed’s Rate Hike Be Its Tailwind?

4 Mins Read HotForex

Last week, the Federal Reserve (Fed) increased its benchmark rate by 50 bp to 0.75%-1.00%,  the largest single hike since May 2000 in an attempt to tackle a 40-year high in US inflation. In addition to reducing asset holdings, Fed Chair Powell signaled a couple of rate hikes by 50 bp in the coming meetings. He also reiterated that the central bank will go down to rate hikes of 25 bp “if inflation comes down”. Fig.1: US Non Farm Payrolls and Unemployment Rate. Source: Trading Economics On the other hand, the Non-Farm Payrolls in April 2022 recorded an increase of…

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HotForex

Market Update – May 9 – USD dominance rips through every market on FED

3 Mins Read HotForex

Monday Markets Blues Can the cause sometimes take place after the effect? This is what looks to be the case this week. The USD surged to 2001 and has been bought and fixed income sold on ideas that the Fed had taken a hawkish turn, with investors searching for safety.  The hikes will be front-loaded with the next 50 bp hikes discounted for the next two meetings (June and July) and a strong leaning for the same in September (~66%). Yields 10-year is up 1.0 bp at 3.14%. Stock markets are broadly lower, with Japanese markets underperforming and the Nikkei down -2.5%. Tighter Covid lockdowns…

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HotForex

Market Update – May 6 – Massive U-turn ahead of NFP

3 Mins Read HotForex

The markets did a big U-turn after Wednesday’s post-FOMC rally, and the pop in rates hammered Wall Street. Along with positioning, the recent massive swings in the markets and mostly bearish tones have been fostered by escalating fears over inflation, an overly aggressive tightening path from the Fed, and increasing angst over slowing growth, in other words, “stagflation.” That potential was imbedded in the Q1 productivity report that revealed near record contraction in productivity as well as unit labour costs, leaving a hollow ring to Chair Powell’s beliefs that the Fed can tame inflation and that the economy can achieve…

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HotForex

GBP after BoE flagged stagflation risks

6 Mins Read HotForex

We saw another dovish rate hike from the BoE, as the central bank delivered a strong stagflation warning alongside a quarter point lift to Bank Rate, which now stands at 1.00%. The BoE’s projections implied that market pricing had been too aggressive on future rate hikes, which saw Gilts rallying in the wake of the statement, despite the bank’s announcement that it will now consider starting to sell its bond holdings. ECB members, which seem at loggerheads over the timing of the first rate hike, may take note, as Fed and BoE moves this week are a showcase on how…

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Events to Look Out for Next Week

5 Mins Read HotForex

After a volatile week, with the FED, BOE, RBA and US Jobs out of the way, all eyes are on US Inflation and on central bankers once again. The Jobs do not change the overall narrative of moderate Q2 growth and still elevated inflation. While it is still difficult to determine the degree to which the tightening is impacting  the financial markets, the economy transitions out of the pandemic amid ongoing supply chain bottleneck disruptions. Have a look at the most important events of the coming days in our usual weekly publication. Monday – 09 May  2022 Trade Balance (CNY,…

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Armstrong

Market Talk – May 5, 2022

6 Mins Read Armstrong

ASIA: India’s central bank raised its main lending rate off record lows in a surprise move on Wednesday to contain rising inflation, shocking markets and pushing the benchmark 10-year bond yield to its highest levels in three years. The Reserve Bank of India raised the repo rate – the rate at which it lends to
The post Market Talk – May 5, 2022 first appeared on Armstrong Economics. source: armstrongeconomics.com/blog

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