Cotygodniowe podsumowania

Moody’s downgrade of the US sovereign debt is undermining confidence in the US economy and is weighing on investor sentiment.

Softer-than-expected inflation readings last week reignited expectations of a more dovish Federal Reserve stance.

The Fed decided to keep interest rates steady amid persistent inflationary pressures and an uncertain economic outlook.

The Fed is expected to keep interest rates steady this week, and market participants will focus mostly on the central bank’s forward guidance.

The uncertainty of US policies and trade tariffs has undermined investor confidence in the dollar, putting its safe-haven status in question.

US Non-farm Payrolls on Friday showed that the US economy added 228K new jobs in March, up from 117K in February and well above the estimated 135K.

Core PCE Price Index, which is the Fed’s preferred inflation gauge, came in above expectations, reigniting inflation concerns.

Fed Chair Jerome Powell delivered a hawkish message after the policy meeting, stating that the central bank is hurryingly to lower interest rates.

US inflation is cooling faster than anticipated, with headline inflation rising by 2.8% year-on-year in February after rising by 3.0% in January.

The US labor sector is deteriorating, which may prompt the Fed to lower interest rates sooner than expected.

The minutes of the January FOMC meeting were overall hawkish, as policymakers were concerned with the impact that trade tariffs might have on US inflation.

US inflation data released last week were hotter than anticipated, lowering Fed rate cut expectations.

Concerns that US inflation will rise again are raising the likelihood that interest rates will remain at restrictive levels for longer.

Fed Chair Jerome Powell stated that the central bank needs to consider potential policy changes under Trump’s administration.

Odds of another rate cut before summer are low and traders will focus on the Fed’s forward guidance to predict the timeline for future rate cuts.

US inflation data last week came in lower than anticipated, indicating that disinflation in the US is progressing, which may affect the Fed’s rate outlook.

The NFP report released on Friday showed that the US jobs sector remains secure and solidified policymakers’ shift to a more hawkish direction.

A risk-off sentiment prevailed near the end of 2024, and increased demand for safe-haven assets boosted the dollar.

The Fed’s updated dot plot was more hawkish than anticipated, bringing down expectations of future rate cuts.

The Fed’s updated dot plot will determine the central bank’s rate outlook and affect market expectations of rate cuts into 2025.

NFP labor data last week showed that the US jobs sector remains robust, raising Fed rate cut expectations in December to 90%.

President-elect Donald Trump communicated more tariff measures on Tuesday, causing increased volatility in Forex markets.

Market odds of future Fed rate cuts reflect the divergence in policymakers’ opinions, with odds of a December rate cut hovering near 55%.

The dollar added gains as Republicans secured full control of the US Government, allowing Trump’s administration to pass laws more easily.

Powell stressed that the US president is not permitted to remove the Fed Chair, indicating that he intends to complete his term of office.

Non-farm payrolls were affected by hurricanes in October and dipped to just 12K, against expectations of 106K.

The Federal Reserve is expected to keep interest rates steady this week but will likely signal a rate cut in September.

Fed rate cut expectations in September were catapulted above 90% after the release of the US inflation report.

Fed chair Jerome Powell stated that significant progress has been made on disinflation, hinting at a rate cut in September.

Annual Core PCE cooled to 2.6% in May from 2.8% in April indicating that price pressures in the US are easing.

According to the central bank’s revised dot plot, Fed officials expect to cut interest rates only once in 2024.

Market odds of a rate cut at this week’s policy meeting are almost zero and traders will focus mostly on the Fed’s forward guidance.

Disappointing US economic data and easing inflationary pressures drove the dollar down last week.

The US inflation outlook remains focused the week ahead with the Core PCE Price index, the Federal Reserve’s preferred inflation gauge, due on Friday.

Signs that cooling US inflation fuelled expectations of a rate cut in September driving the dollar down.

We expect interest rates to remain steady this week and traders will focus on Fed chair Jerome Powell’s forward guidance.

Powell stated that the progress of disinflation is slower than originally anticipated and will likely affect the timeline of Fed rate cuts.

US inflation surprised on the upside last week, rising by 3.5% year-on-year in March and exceeding February’s 3.2% print.

The US labor market remains robust and may encourage the Fed to delay cutting interest rates until inflation drops closer to the central bank’s 2% target.

Powell stated that policymakers are not far from acquiring confidence that US inflation will continue to drop sustainably.

US Core PCE Price Index dropped marginally in January, indicating that US disinflation is progressing, albeit slowly.

Fed officials wish to see more evidence of disinflation before moving ahead with cutting interest rates.

Markets were anticipating a sharp drop in inflation in January, which was not realized, dashing expectations of early Fed rate cuts, and boosting the dollar.

Markets will be focusing on the US inflation report on the 13th, with headline inflation expected to drop to 2.9% year-on-year in January from 3.4% in December.

The Fed has removed the tightening bias from its policy statement, indicating that the central bank is preparing to pivot to a less restrictive monetary policy.

Fed Chair Jerome Powell’s press conference after the meeting will attract a lot of attention as traders will focus on the central bank’s forward guidance.

Markets odds of a 25 bp rate cut in March dropped below 55% this week from 70% last week propping up the dollar.

Markets currently anticipate more than 155 basis points of easing in 2024, compared to 130 basis points last week.

US jobs data last week exceeded expectations, raising the odds of a Fed pivot towards a more dovish policy.

The Fed is likely preparing to pivot to a less restrictive monetary policy, even though US policymakers insist that it is too early to talk about rate cuts.

Preliminary GDP showed that the US economy expanded by 5.2% in the third quarter of 2023 against expectations of a 5.0% growth.

FOMC meeting minutes emphasized that interest rates will likely remain in restrictive territory for some time.

Market odds of another rate hike in December have dropped to zero, while markets are pricing in rate cuts as early as March.

Powell hinted that policymakers are not confident that they have achieved a sufficiently restrictive stance to return inflation to the Fed’s 2.0% target.

Markets were not convinced that the Fed intends to resume its tightening cycle, and odds of a rate hike in December have dropped to less than 5%.

A pause in rate hikes this week has already been priced in and market participants are expected to focus mostly on the Fed’s forward guidance.

Market odds turned in favor of an end to rate hikes after several FOMC members hinted that the Fed has reached its rate ceiling.

US inflation data on the 11th and the 12th are the most highly-anticipated fundamentals of the week, as the Fed’s future monetary policy will depend mainly on the US inflation outlook.

Core PCE Price Index data last week indicated that price pressures in the US are easing, increasing the odds of a pause in rate hikes in November.

Particularly illuminating was the Fed’s dot plot, which illustrates the anticipated trajectory of borrowing costs and points to another rate hike within the year.

Odds that the Fed will raise interest rates one more time this year are increasing, although most analysts predict that the Fed has already reached its rate ceiling.

Markets are expecting a pause in rate hikes this month but market odds of another rate hike in November are increasing.

Prolonged economic tightening has put considerable strain on the US economy, which expanded by only 2.1% in the 2nd quarter of 2023, against expectations of 2.4% growth.

The Fed’s forward guidance gave the central bank flexibility towards adjusting its future monetary policy and adopting a data-dependent approach.

If the Fed maintains a hawkish bias and points to more rate hikes up ahead, increased interest rate expectations may boost the dollar.

Even though US inflation slowed more than expected in June, dropping close to the Fed’s 2% goal, most analysts expect another 25-bp rate hike in July.

Powell hinted that consecutive rate hikes may be resumed, stressing that the majority of FOMC members are in favor of two more rate hikes this year.

Powell stated that a strong majority of FOMC members feel that interest rates should go up further and hinted at the possibility of two more rate hikes.

There is growing speculation that, even though the Fed may not raise interest rates this week, that does not necessarily mean an end to its tightening cycle.

US President Joe Biden and Republican House Speaker Kevin McCarthy are negotiating a deal that would raise the government's debt limit, preventing the US from going into default.

US Federal Reserve Chair Jerome Powell caused a stir in markets, as his statements indicated that the US Central Bank may pivot towards a more dovish direction.

The US Central Bank has signaled that its hawkish policy is coming to an end, as prolonged tightening is putting the economy at risk.

Stability has been gradually returning to the Banking sector, removing some of the incentives to invest in safe-haven currencies, such as the dollar.

The much-anticipated US inflation data are coming up this week, with CPI on the 12th expected to decrease to 5.2% year-on-year in March from 6.0% in February.

The collapse of Silicon Valley Bank may steer the Fed towards a less hawkish direction, in fear of contagion in the financial sector.

Fed rhetoric reinforced the notion that the US central bank may slow down the pace of rate hikes but a pause in the central bank’s tightening policy is not on the cards yet.

Core PCE data combined with CPI and PPI data released earlier this month indicate that the Fed has still a long way to go to rein in inflation.

January’s CPI and PPI inflation prints illustrate the danger of inflation becoming entrenched and may induce the Fed to rethink its recent dovish pivot.

Repeatedly hawkish Fed speak has begun to drive the message home that further rate rises should be expected and that interest rates will need to remain high for a long period.

The Federal Reserve finally decided to relax its monetary tightening, raising interest rates by only 25 basis points last week.

The Fed’s preferred inflation gauge, PCE, dropped to 4.4% in December and may induce the Fed to pivot towards a more dovish direction in its policy meeting this week.

US inflation data fell below expectations driving the dollar down, as PPI declined by 0.5% in December, versus estimates of a 0.1% drop.

The soft inflation print put pressure on the dollar, as cooling price pressures may give the Fed some leeway towards scaling back its rate hikes.

Signs of cooling US inflation caused the dollar to plummet on decreased Fed rate hike expectations.

Reduced price pressures may give the US Federal Reserve some leeway towards scaling back its interest rate raises, increasing the likelihood that the Fed will ease its rate hikes in 2023.

Cooling price pressures may give the US Federal Reserve some leeway to scale back its interest rate increases in the following year.

Market expectations currently range between a 50-bps and a 25-bps interest rate increase this week, with odds in favor of a 25-bps rate hike.

Fed Chair Jerome Powell delivered an unexpectedly dovish speech stating that he sees rate hikes slowing down as soon as December.

The minutes of latest FOMC minutes have revealed that there is no clear consensus among Fed members at the moment, leading to mixed signals for the markets.

Market expectations of future rate hikes were considerably trimmed after the CPI inflation report and were further diminished after Tuesday’s PPI inflation print.

US inflation data for October fell below projections, with annual CPI printing at 7.7% against 7.9% expected, indicating that US inflation is cooling faster than expected.

The US Federal Reserve voted to increase interest rates by 75 basis points last Wednesday, bringing its benchmark interest rate in a range of 3.75% to 4.0%.

All eyes are going to be on the Fed monetary policy meeting on Wednesday with the odds in favor of another rate hike of 75-bps, bringing the interest rate to 4.0%.

US Treasury yields soared, with the US 10-year bond yield climbing above 4.3%, its highest level since June 2008, and the two-year yield surging above 4.6%, its highest level since August 2007.

US inflation reached 8.2% on an annual basis in September putting pressure on the Federal Reserve to continue its policy of monetary tightening.

US employment data were optimistic, indicating healthy job growth, increasing the likelihood that the Fed will maintain its aggressively tight fiscal policy.

Hawkish Fed rhetoric propelled the dollar to fresh 20-year highs early last week on expectations of steep rate hikes, with the dollar index climbing to 114.7.

Fed Chair Jerome Powel stated that the Fed is determined to curb inflation, even to the expense of economic growth, raising expectations of future rate hikes.

The US Federal Reserve is expected to raise its benchmark interest this week to combat persistently high inflation rates, with markets pricing in another 75 basis points rate hike.

As more major Central Banks are shifting toward a tighter monetary policy, the divergence between interest rates with the Fed becomes less apparent, putting pressure on the dollar.

Fed rhetoric remained firmly hawkish, with FOMC member Loretta Mester stating that she sees the Fed benchmark interest rate rising to 4% and no rate cuts through 2023.

In his much-anticipated speech at the Jackson Hole symposium last week, Fed Chair Jerome Powell showed no signs of wavering in the battle against inflation.

FOMC meeting minutes released last week indicated that Fed members are still committed to raising interest rates, pointing to a steep rate hike in September and providing a major boost for the dollar.

US inflation data are likely to play a decisive role in the Fed’s rate hike in September, as the sudden drop in inflation may induce the Fed to hold back from an aggressive monetary tightening.

The dollar rallied last week, as stronger than expected economic activity and employment data towards the end of the week helped quell recession fears.

Markets are becoming more moderate in their expectations of a Fed rate hike, as slow economic activity indicates that the US economy may not be able to withstand aggressive tightening.

The dollar spiked last week, boosted by soaring US inflation rates, with the dollar index rising above 109.2 and setting a fresh 20-year high.

Robust financial and employment data show that the US economy is not at imminent risk of recession, increasing the chances of a steep rate hike in July. 

Recession fears are boosting the safe-haven dollar, outweighing concerns of US economic downturn spurred by weak economic data.

In his testimony before the Senate Banking Committee, Fed Chair Jerome Powell stressed the importance of bringing US inflation down and admitted that recession was certainly a possibility.

Record high US inflation rates have forced the Fed to ramp up its efforts by performing its steeper rate hike since 1994 and bringing its benchmark interest rate to 1.75%.

The Fed is expected to raise its benchmark interest rate by 50 base points on Wednesday, continuing its policy of monetary tightening and gradual return to pre-pandemic rates.

The dollar has been retreating on a mix of weak economic data and unstable market sentiment, although hawkish Fed rhetoric supports the currency.

FOMC meeting minutes indicate that FOMC members are prepared for a series of rate hikes of 50 base points each, confirming that the Fed intends to move with a gradual but steady pace towards monetary policy normalization.

The USD, which has been trading into overbought territory, faced its worst week since January, weakened by unstable market sentiment and lack of support from Treasury yields.

Several FOMC Members have adopted a hawkish stance and openly support a 50 base point rate hike, increasing the probability that the voting in the next policy meeting will be in favor of such a rise.

Fed Chair Powell stated last week that the Fed is not considering a 75 bs rate hike for the next policy meeting, thwarting market expectations and driving the dollar down.

The Fed may move towards a policy of quantitative tightening at its meeting this Wednesday, by starting to trim its 9 trillion USD balance sheet.

US Federal Reserve Chair Jerome Powell seems to be in favor of an aggressive rate hike, stating that a 50 base point increase in the Fed’s benchmark interest rate is on the table for the Fed’s next policy meeting in May.

Inflation remains one of the biggest problems for the US economy, with CPI data showing that headline inflation rose to 8.5%, its highest rate since 1981, and PPI data marking their biggest increase in over a decade.

FOMC minutes showed that several Fed officials were in favor of a rate hike of 50 base points last month, increasing the chances of a 50 bp increase in the Fed’s benchmark interest rate in May.

The dollar was boosted by hawkish Fed rhetoric, increasing the odds of a 50 bp rate hike at the Central Bank’s next meeting, with markets anticipating total rate hikes of at least 175 base points within the year.

The 10-year US treasury yields rose to a two-year high of 2.5% last week, providing support for the dollar, as investors anticipate a more aggressively hawkish Fed policy.

Diplomatic talks between Russia and Ukraine last week have sparked hopes of a de-escalation of the conflict, although Russian attacks continue.

War continues raging in Ukraine for almost 20 days now, with heavy casualties including civilians and children.

Western allies announced that they would be blocking "a certain number of Russian banks" from access to the SWIFT banking system and impose restrictions on Russia’s Central Bank, that would effectively cut off Russian Banks from the international financing system and undermine the Russian Central Bank’s ability to support the collapsing Rubble.

Geopolitical tensions were re-ignited and investors turned towards safe-haven assets, with gold price climbing to $1,900 per ounce, while crypto markets were hit hard, with Bitcoin plummeting below the $40,000 key level.

The EU is building a partnership for energy security with the US and other Natural Gas suppliers, in an attempt to mitigate a potential energy crisis and shield the EU from energy shortages.

The EU relies on Russia for most of its natural gas and oil imports, as well as for wheat and other commodities, and a disruption in supply might result in a rise in prices and an increase in inflation rates for the Eurozone.

The dollar picked up momentum after the Federal Reserve released a more hawkish statement than anticipated, with the dollar index climbing to almost 97.5 points on Friday.

WTI price rose to a 7-year high of over $86 per barrel, oversupply concerns and tight oil inventories.

The past year saw an increase in the price of the dollar, as the pandemic started to recede and global economy was set on the path to recovery.

The yearly US CPI rate announced on Wednesday registered the biggest annual gain since 1982, but the USD sank even further, after US inflation rates rose but still came in line with expectations.