Markets now see a much lower chance of a Fed rate cut in March after Jerome Powell called it unlikely, sending stock markets lower.
➡️ Yesterday's closely watched US Federal Reserve policy meeting produced an aggressive turn with Jerome Powell saying a rate hike in March was unlikely. This brought the CME FedWatch tool's forecast of a March cut sharply lower, to a forecast probability of only 36%. Counterintuitively, the US dollar continued to rise despite this aggressive stance. Powell also said good progress has been made in combating inflation, but he remains concerned that it may stabilize at a relatively high level, above the 21TP3Q target. Shares fell after the meeting, with the NASDAQ 100 index down by almost 3% compared to last week's all-time high, while the benchmark S&P 500 index it fell only 1.6% from the all-time high reached on Tuesday.
➡️ The Bank of England will hold a policy meeting today. There is very little chance of any changes in the interest rate, but the wording of the statement will be carefully monitored.
➡️ Yesterday's ADP forecast of net new jobs to be announced in Friday's nonfarm payrolls data was significantly lower than expected, projecting the creation of only about 100,000 net new jobs.
➡️ Canadian GDP data released yesterday was slightly higher than expected, showing a month-over-month increase of 0.2% versus expectations of 0.1%.
➡️ Crude oil is declining after consolidating near a 2-month high price, despite tensions in the Red Sea and Indian Ocean following last night's US retaliation against Houthi missile and UAV capabilities.
➡️ In the Forex market, the Japanese yen and the US dollar have been the strongest major currencies since Tokyo opened today. The Australian dollar was the weakest, putting you at the center of attention the AUD/USD currency pair . Increased volatility has recently been observed in the currency pair USD/JPY . The Japanese yen has attracted some safe haven flows.
➡️ Cocoa futures reached a new multi-year high price yesterday, which will keep trend traders interested in this commodity on the Long side. It has shown a powerful bullish trend for over a year.
➡️ US ISM Manufacturing PMI data and US unemployment claims will be released today.
Credit by DailyForex.com