The USD is little changed in up and down trading vs both the EUR and the GBP, while the greenback is lower vs the JPY as some profit taking from the run higher kicks in to end the trading week. IN the video, I take a look at the technicals that are driving the price action as the week comes to an end. What levels should you be watching and why?
IN other markets, the US stocks are rebounding in early US trading after declining earlier today. The catalyst was a comment from Fed's Williams saying that the Fed can still cut rates in the near term given current policy is modestly restrictive. The expectations for a Fed cut have been dwindling as most Fed officials - led by Cleveland Fed Pres. Beth Hammack - has been less inclined to cut rates in December given the high inflation.
Yesterday, Hammack warned that cutting rates now would risk prolonging high inflation and could also create new financial-stability problems. Hammack argues that easing too early may encourage excessive risk-taking, distort market pricing, and undermine financial discipline.
She emphasizes that the financial system is currently solid — banks are well-capitalized and household balance sheets are healthy — so there is no urgent need for rate cuts from a stability standpoint. As a result, she does not appear likely to support easing any time soon.
Also yesterday, Fed President Austan Goolsbee leaned more cautious than dovish right now. He’s uneasy about delivering another rate cut in December because inflation has been “steady at best” and in some measures worsening. With recent data uncertain — and the government shutdown delaying key inflation readings — he’s concerned the Fed could “front-load” easing before knowing whether the latest inflation uptick is temporary.
That said, he’s not hawkish in the medium term: he still expects rates to eventually settle well below current levels. But for now, he believes the inflation risks outweigh the labor-market risks, so the Fed should pause and get more clarity before cutting again.
There are a slew of Fed speakers on tap today. Below is a list with the expected times:
Fed Speakers Today
8:00 AM – FOMC Member Collins speaks
8:30 AM – FOMC Member Barr speaks
8:30 AM – FOMC Member Miran speaks
8:45 AM – FOMC Member Jefferson speaks
9:00 AM – FOMC Member Logan speaks
Yesterday, the nonfarm payroll from September was higher than expected at 119K vs 53K estimate. However, the reported rate moved higher to 4.4% from 4.3%.
US stocks are now higher:
- Dow industrial average up 265 points. Yesterday the index fell -386.51 points
- S&P index up 26 points. Yesterday the index fell -103.40 point or -1.56%.
- NASDAQ index up 47 points. Yesterday the index tumbled 486.18 points or -2.15%
Looking at the US yield curve:
- 2-year yield 3.507%, -5 point basis points
- 5 year yield 3.619%, -5.4 basis points
- 10 year yield 4.063%, -4.1 basis points
- 30 year yield 4.712%, -2.0 basis points
Bitcoin continues to get hammered it is currently down $-3150 or -3.53% at $83,483. The price has tumbled more than 35% since its peak at the beginning of October.
Crude oil is down $-0.62 at $58.39.
Gold is down $14 at $4062.
