In an interview, Fed Chair Jerome Powell says a rate cut in March is unlikely, suggesting three rate cuts this year starting in May.
➡️ A few hours ago, Fed Chair Jerome Powell gave an interview in which he reiterated that inflation is slowing, the economy is healthy and that the Fed will most likely not cut rates in March. This continues to move us away from the expectation of rate cuts starting in March. The notable impact was a further jump in US Treasury yields, which also received a boost from Friday's much stronger-than-expected nonfarm payrolls data. Tahe CME's FedWatch tool showed the chances of a rate cut in March falling sharply, with only a 17.5% chance, compared to the rating of a 36% chance last Thursday. This will likely be a headwind against the US dollar and perhaps even US stock markets, though the main US stock indices are close to historical highs.
➡️ Friday's nonfarm employment data was significantly higher than expected, with 353,000 net new jobs created when only 187,000 were expected. Average hourly wages increased by 0.6% month over month, a surprisingly high number. The unemployment rate unexpectedly fell from 3.8% to 3.7%. This data shows than the US economy is still hot, making rate cuts potentially inappropriate.
➡️ In the Forex market, the New Zealand dollar has been the strongest major currency since Tokyo opened today. The Swiss franc was the weakest. Increased volatility has recently been observed in the currency pair USD/JPY .
➡️ Cocoa futures on Friday have reached a new multi-year high price, which will keep trend traders interested in this commodity on the Long side. It has shown a powerful bullish trend for over a year.
➡️ ISM USA services PMI data will be published today.
➡️ Given that it is Monday and little impactful data is expected today, it will likely be a relatively quiet day in the financial markets.
Credit by DailyForex.com
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