Last week was chaotic. The Federal Reserve’s (Fed) hawkish 25bp cut, the hint from the dot plot that there would be only two rate cuts next year instead of four – because the US economy is too strong to continue the cuts as previously predicted – and the US debt limit shenanigans even before Trump […]

The post Let’s Focus on the Good for a Few More Days appeared first on Action Forex.

The financial markets were jolted by Fed’s hawkish rate cut last week, sending ripples across stocks, bonds, currencies, precious metals, and even cryptocurrencies. Fed’s indication of prolonged restrictive monetary policy fueled risk aversion, pushing Dollar to end the week as the strongest performer in the currency markets, supported by surging yields and elevated Fed expectations. […]

The post Dollar to Pause for Consolidation After Failing to Break Euro Resistance Post-Fed appeared first on Action Forex.

Markets A looming US government shutdown starting as soon as tonight is capturing market and media attention. Policymakers had agreed on a bipartisan deal to fund spending through March 24. Enter Trump and Musk. Both urged Republicans to kill the deal, a.o. because it didn’t raise the debt ceiling. Trump otherwise has to address the […]

The post Sunset Market Commentary appeared first on Action Forex.

Markets Front end US yields returned a few bps of the sharp Fed-induced gains yesterday but the long end extended its march higher. The 10-30-yr bucket added between 4.8 and 5.9 bps. Economic data, while second tier, again in most cases underscored the country’s economic resilience. European swap rates gapped higher in a first response […]

The post Expect Dollar to Hold Near Recent Strong Levels appeared first on Action Forex.

A week packed with central bank decisions is coming to an end with a sour taste in everybody’s mouth. The Federal Reserve (Fed)’s decision to cut rates by 25bp was fully meaningless and the incoming data is a proof. The US Q3 growth was revised to 3.1% from 2.8% printed earlier, the sales growth was […]

The post USD Advances Toward the Strongest Levels in More Than 2 Years appeared first on Action Forex.

In focus today In the euro area, we get data on consumer confidence for December. Consumer confidence has been on a rising trend the past two years but in November it unexpectedly declined. It will be very import for the growth outlook to see if the decline was just a blip or it continued in […]

The post Riksbank Rounds Off the Cutting Season appeared first on Action Forex.

Markets The Fed lowered policy rates yesterday from 4.5%-4.75% to 4.25-4.5%, a level chair Powell said is still “meaningfully restrictive”. The decision was expected but not unanimous. Cleveland Fed Hammack voted to keep rates steady which given the circumstances had a lot to say for. The economy is doing fine with GDP forecasts left unchanged […]

The post It’s Higher for Longer All Over Again appeared first on Action Forex.

Fed’s hawkish rate cut overnight sparked an outsized market reaction, with DOW plunging over -1100 points and NASDAQ losing -3.5%. Fed’s messages didn’t deviate from expectations leading to the meeting, indicating a slower easing path in 2025 with likely just two more rate cuts and a terminal rate near or above 3.0%. But markets responded […]

The post Market Chaos Unfolds Despite Widely Expected Fed Hawkish Cut appeared first on Action Forex.

In focus today A packed European central bank day kicks off with the Riksbank decision at 9:30 CET. We expect a 25bp cut to 2.50% and that the central bank will maintain a message of more cuts at the beginning of 2025. Following the November decision to cut by 50bp to 2.75%, the communication has […]

The post Big Central Bank Day Ahead appeared first on Action Forex.

Markets When (core) markets barely move the way they do today it’s because there’s little news or important events are looming. It’s both in this case. An empty economic calendar and the Fed policy meeting tonight resulted in technical and directionless trading in FI and FX markets. US yields swapped tiny gains of 1.5 bps […]

The post Sunset Market Commentary appeared first on Action Forex.

Dollar has strengthened against commodity currencies this week but remains range-bound against Euro and Pound, as markets await Fed’s rate decision to gauge the next move. While a 25bps rate cut is fully expected in with no chance of deviation, the focus is on how hawkish Fed’s messaging will be. Key questions include the likelihood […]

The post Dollar Awaits Fed Clarity on Easing, Sterling Shrugs Strong Inflation Data appeared first on Action Forex.

Markets Retail sales for November were solid on face value though the details offered a more balanced picture. That was enough to cap the intraday rise in US yields. Net daily changes varied in a tight range between -1 bps and +0.7 bps in an otherwise uneventful session. German rates eased up to 1.7 bps […]

The post We May See Kneejerk Downleg in US (front-end) Yields and Dollar After Dot Plot Release appeared first on Action Forex.

FOMC rate decision takes center stage today, with a 25bps rate cut widely anticipated, lowering the federal funds rate to 4.25–4.50%. Markets see virtually no chance of a different outcome, making the focus squarely on Fed Chair Jerome Powell’s statement and the updated economic projections. Expectations are for Fed to signal a slower pace of […]

The post Key FOMC Questions: Pause in January, Easing Path in 2025, and Neutral Rate appeared first on Action Forex.

In focus today Focus today will be on tonight’s FOMC meeting. We expect a 25bp cut, which is also fully discounted by markets. Apart from the rate decision, market attention will be on the updated rate projections, and especially on the FOMC’s latest view on the terminal rate level. We think Chair Powell will aim […]

The post Fed Cut Coming Up appeared first on Action Forex.

Markets Relative market calm this morning was already disturbed sooner than expected by the publication of the UK labour market data. The unemployment rate remained unchanged at 4.3% and November payrolls declined a bigger than expected 35k. However, it was wage growth data catching the eye just two days before the final BoE policy meeting […]

The post Sunset Market Commentary appeared first on Action Forex.

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 […]

The post Canada’s Minority Government on the Brink of Collapse appeared first on Action Forex.

In focus today In the afternoon, US November retail sales and industrial production are due for release. Leading soft indicators gave very conflicting signals in November, so the Fed will closely follow hard data releases for stronger conviction on the direction of the economy. In Germany, we receive two growth and sentiment indicators from Ifo […]

The post Recovering PMIs appeared first on Action Forex.

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 […]

The post Sunset Market Commentary appeared first on Action Forex.

The proposed policies of Trumponomics 2.0 may ignite a further uptick in inflationary expectations in the US. Market-transacted inflationary expectations gauge, the 5-year and 10-year US breakeven inflation rates have been trending higher since September 2024. The Fed may switch its current dovish monetary policy to a “wait and see” pivot stance on 18 December […]

The post Gold Technical: A Less Dovish Fed May Reinforce a Medium-Term Corrective Decline appeared first on Action Forex.

In focus today Today all eyes are on the euro area December flash PMIs as the very large decline in November caused significant market moves. There was nothing positive in the November report where the services PMI fell below 50 to 49.5 for the first time since January, and the manufacturing PMI remained stuck at […]

The post Flash PMIs in focus appeared first on Action Forex.