Dollar edged higher in subdued holiday trading, maintaining its recent  strength but staying within a narrow range below last week’s highs against major currencies. Markets largely brushed aside the disappointing US durable goods orders data, as the series is known for its volatility. Moreover, traders are prioritizing labor market and consumption trends, which Fed views […]

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As markets wind down for the year-end holiday period, forex trading activity turns subdued, with limited momentum across major pairs. Dollar, while maintaining its position as the strongest currency of the month, is facing challenges in decisively breaking last month’s highs against European majors. However, the greenback still made some headway against Yen and commodity […]

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In an interview with the Financial Times, ECB President Christine Lagarde expressed optimism about nearing the inflation target. She remarked that ECB is “very close” to declaring that inflation has been “sustainably” brought back to its 2% medium-term target. The latest inflation reading of 2.2% reflects the success of ECB’s restrictive monetary policy. However, she […]

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The forex and stock markets are holding steady today, with limited volatility as traders anticipate FOMC rate decision and updated economic projections. A 25bps rate cut, reducing the target range to 4.25–4.50%, is virtually certain. However, the market’s focus lies on the tone and guidance Fed delivers. Critical questions include whether a pause in easing […]

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The Federal Reserve is set to announce its interest rate decision today at 21:00 GMT+2, with Fed Chair Jerome Powell holding a press conference 30 minutes later. According to Forex Factory, the market expects a rate cut to 4.25%-4.50% from the current 4.50%-4.75%. Analysts at Apollo Global Management, in their Economic Outlook, predict: → In […]

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ECB Chief Economist Philip Lane highlighted the importance of maintaining “agility” in monetary policy decisions during a speech today. Lane emphasized that in the current environment of elevated uncertainty, ECB’s “prudent” approach will be guided by a meeting-by-meeting strategy without pre-committing to any specific rate path. Lane outlined that the pace of monetary easing will […]

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Canadian Dollar trades broadly lower today while commodity currencies are generally soft. Canada’s CPI report reinforced the outlook of stable inflation hovering around target. BOC has likely completed its aggressive rate-cutting phase and pauses in policy easing are anticipated at some meetings next year. Nonetheless, the direction remains clear: further rate reductions are expected to […]

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Finland’s ECB Governing Council member Olli Rehn highlighted growing risks to Europe’s economic outlook with the uncertainty over trade policy as a key downside factor. Rehn warned that Europe must be prepared to respond to potential trade conflicts with the US, emphasizing that while “negotiation is preferable,” EU’s position could be strengthened by demonstrating readiness […]

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Markets Yesterday’s PMI releases in Europe and the US confirmed the ongoing divergence in growth on both sides of the Atlantic, cementing market expectations on similar divergence in Fed and ECB policy. The S&P global US flash PMI showed output growth at the end of the year at a 33-month high (56.6 from 54.9) amid […]

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Markets Slightly better-than-expected December EMU PMI’s showed business activity decreasing for the second month running. The rate of contraction was slower than in November though (49.5 from 48.3). A modest return to growth of services (51.4 from 49.5) was unable to erase the continuing downturn in manufacturing (45.2; unchanged). As has now been the case […]

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Yen weakened across the board today in an otherwise consolidative market , as traders increasingly anticipate that BoJ will hold steady on monetary policy at its upcoming this week. BoJ policymakers appear to see no urgency in extending the tightening cycle this month, preferring instead to wait for January’s updated economic projections before deciding on […]

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ECB President Christine Lagarde’s speech today marked a departure from previous guidance shaped by high inflation and significant uncertainty. Lagarde highlighted that the earlier approach, which aimed to maintain restrictive rates “for as long as necessary,” is no longer aligned with the ECB’s evolving outlook for inflation and risk balance. However, with “disinflation process well […]

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Markets German and EMU yields on Friday initially only showed minor gains, but finally extended the rebound that gradually developed earlier last week. US yields added 5.4 bps (2-y) to 6.9 bps (10-y). There were no important US data, but markets apparently are pondering whether recent solid US activity data, slightly higher inflation and uncertainty […]

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China’s latest efforts to convince investors that it will boost its economy with great stimulus measures had the same reaction than the previous ones: disappointment. On Friday, the Chinese authorities repeated that they will boost consumption but the lack of details reversed the pre-announcement enthusiasm and sent the CSI 300 more than 2% lower. And […]

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Dollar ended as the strongest performer last week, boosted by a surge in U.S. Treasury yields following persistent inflation data. Despite expectations of another 25bps rate cut at the upcoming FOMC meeting, stubborn price pressures are likely to slow the pace of policy easing next year. Adding to the caution, inflation uncertainties under the incoming […]

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Summary United States: Sticky Inflation, Sticky Wicket for the Fed Price data this week showed that inflation remains stubbornly above the FOMC’s target. Overall inflation has trended sideways in recent months, and while we do not expect this week’s data to prevent the Fed from cutting another 25 bps next week, it will likely contribute […]

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Markets had a volatile week, with US 100 (Nasdaq 100) reaching new highs and a strong likelihood of a Fed rate cut next week. Major central bank meetings dominate the week ahead. The BoJ faces a tough decision on whether to raise interest rates, with recent data supporting a hike. The US Dollar Index (DXY) […]

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As economic data continues to confirm that the inflation problem is more or less over, there is no longer a need for central banks to maintain restrictive levels of interest rates. Hence, this has been a week of rate cuts, and we expect next week to be the same – with some important nuances and […]

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Markets European yields and the euro today gained minor further ground after succeeding an intraday reversal yesterday after the ECB 25 bps cut (to 3.0%). First post-meeting comments from ECB policy makers confirmed that more easing will follow. Internal debate on the pace (Kazaks still keeps the door open for a bigger step) and the […]

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The Euro rebounded broadly today, buoyed by reassurances from a number of ECB officials that the central bank remains committed to a gradual approach to policy easing. Yesterday’s 25bps rate cut appears to have had solid consensus backing, with no indications that a more aggressive 50bps cut was even seriously debated. Despite recent economic softness […]

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