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- Several members of the FOMC have commented that inflation has not yet been fully suppressed, and that it is possible that the Fed may need to make more than one more rate hike within its ongoing round of tightening. This may be helping the US Dollar to steady today. However, the consensus remains that there will be only one more hike, at this month’s Fed meeting, of 0.25%.
- Chinese GDP data released earlier showed weaker than expected economic growth, at 6.3% when a rate of 7.1% was expected. However, stock markets in Asia remain mixed to bullish, with the Hang Seng Index up on the day.
- Friday saw stock markets strongly higher, and the US Dollar Index at a 1-year low, while the EUR/USD and the GBP/USD currency pairs rose to new 15-month highs. Major stock market indices are saw seeing big rises, with both the NASDAQ 100 Index and the S&P 500 Index hitting new 1-year highs. The outlook is bullish for risk assets and bearish for the US Dollar as there is now a more dovish expectation on further US rate hikes, and trend traders will be positioned in these directions.
- In the Forex market, there has been very little directional movement over today’s Asian session, but the Japanese Yen has been the strongest major currency so far today, while the Australian Dollar has been the weakest.
- There will be a release of US Empire State Manufacturing Index later today.
- There will be a release of RBA Monetary Policy Meeting Minutes later today.