- Fed's Bostic: even with rising productivity, the Fed needs to keep focus on inflation
- Macro and geopolitical risks keep a lid on the Nasdaq: What's next for the market?
- Australian Dollar in the spotlight ahead of the monthly CPI report. What's next?
- Dollar may yet benefit from further US-Iran geopolitical escalation - BofA
- The Japanese Yen sinks as PM Takaichi signals opposition to further BoJ rate hikes
- China says it expects to hold trade talks with the US in the near future
- French business climate continues to struggle to start the new year
- Japanese yen falls on report that Takaichi voiced concerns to Ueda on BOJ rate hikes
- What are the main events for today?
- FX option expiries for 24 February 10am New York cut
- It is shaping up to be another rough week for cryptocurrencies
- Japan mulls revising liquidity-support JGB auctions to ease market pressure - report
- Swiss franc to stay favourable amid safe haven allure
The main highlight of the session was the Japanese Yen as the currency sold off across the board following a Mainichi report saying that Takaichi signalled opposition for further BoJ rate hikes at last week's meeting with Governor Ueda. Her dovish views are of course well known, but the yen will continue to weaken as long as the rate hikes get pushed out. The economic data hasn't been supporting a rate hike either.
Other than that, we haven't got any notable news or data release. The US Supreme Court decision on Trump's tariffs continues to reverberate across markets as uncertainty remains high, but overall nothing has really changed. At the margin, we could say that things improved a little bit as the average effective tariff rate fell.
We also had Fed's Bostic speaking but he basically repeated the same old stuff. His focus remains on inflation which isn't surprising given that he's been holding a hawkish stance for several quarters. The most interesting comment was from Fed's Waller yesterday as he mentioned that in case we see a repeat of the strong January's NFP, he would be comfortable holding rates steady.
In the American session, we get the weekly US ADP jobs data and the US Consumer Confidence report. The weekly ADP was a market moving indicator only on the first releases, then it stopped being important. Nonetheless, the data has been showing significant improvement like many other US labour market data.
The US Consumer Confidence is expected at 87.1 vs 84.5 prior. The last report surprised to the downside. The Chief Economist at Conference Board wrote: “confidence collapsed in January, as consumer concerns about both the present situation and expectations for the future deepened. All five components of the Index deteriorated, driving the overall Index to its lowest level since May 2014 (82.2), surpassing its COVID-19 pandemic depths.”
This is a market moving report, especially when the deviations from expectations are large, but at this point it's very unlikely to change anything for the Fed or the market.
