The US Federal Reserve's policy meeting later today will be closely watched by markets for clues on the timing of the next rate cuts, widely expected to start in May 2024.
➡️ The US Federal Reserve will hold a policy meeting today in which it is expected to keep its interest rate at 5.50%. This will be the third consecutive meeting without rate hikes, which would seem to signal that the tightening cycle is truly over. However, his statements and economic projections will be scrutinized for clues about the timing of the next rate cuts, with the market consensus currently expecting the Fed to start with a 0.25% cut in May 2024.
➡️ US inflation data was released yesterday which showed a decline in the annualized rate from 3.2% to 3.1%. The data was almost exactly in line with consensus forecasts, so there were no surprises, but the data appears to have acted as a catalyst for the US stock market to rally. Yesterday it was the NASDAQ 100 index and the benchmark S&P 500 index they closed at the highest price in the last 2 years, making both indices very attractive to trend traders on the Long side.
➡️ Crude oil fell sharply in the last day to trade at new 6-month low prices, which could be interesting for traders following a downtrend. Industry analysts attribute the decline in part to a growing perception of a small glut caused by strong U.S. and Russian supply outpacing demand.
➡️ In the Forex market, since the opening of Tokyo, the New Zealand dollar has been the weakest major currency, while the US dollar has been the strongest, focusing the NZD/USD currency pair. There appears to be no valid long-term trends to exploit in this asset class at the moment, with the direction of the US dollar looking uncertain, although there may be more direction following the FOMC release later today.
➡️ Bitcoin continues to fall from its recent 18-month high above $44,000. It remains to be seen whether it will stabilize at nearby support levels, where trend-following traders may still find new long entries.
➡️ Cocoa futures closed last Friday at a multi-year high weekly closing price.
➡️ UK GDP data and US PPI data will be released today.
Credit by DailyForex.com