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Morgan Stanley says Federal Reserve will hold rates higher for longer, but then cut deeper
- FOMC will cut more deeply than the market expects
Yields are rebounding and with it goes the USD (and stocks)
- Yields rebound above 4.0%, lifting USD and sending stocks lower. EURUSD tests key support while GBPUSD retraces after hitting resistance.
Federal Reserve Bank of Richmond President Thomas Barkin is speaking on Friday
- After key data, NFP and ISM Services PMI
After the NFP data from the US later there is more critical data following - ISM PMI
- What to watch in the Services PMI - consensus ranges
Here is what to watch for an extreme surprise in Friday's US employment report
- Discover how unexpected US data results can significantly affect markets
UBS says Fed December meeting minutes are fuelling confirmation bias
- Market participants interpreting the FOMC minutes based on their pre-existing views.
Employment data coming up from the US on Thursday - December ADP
- Estimates range 99K to 130K, results outside this range should significantly impact markets
Morgan Stanley reiterate their call that the FOMC will wait until June 2024 to cut
- Economic downturn or labor market weakness would be necessary for earlier cuts.
David Rosenberg predicts US recession due to fiscal drag and Fed tightening feeding in
- Negative fiscal stimulus ahead for 2024 despite the US election
US not out of the woods when it comes to inflation - risk the Fed is higher for longer
- Apollo Global Management Chief Economist Torsten Slok
Treasury yields turn lower as 10s reject 4%
- Bid return to bonds
US 10-year yields rise back above 4%, fuelling US dollar gains
- US dollar and yields at the highs
FOMC December meeting minutes coming up - premature rate cut euphoria likely to take a hit
- The minutes pose a danger, likely to push back against massive rate cut expectations
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