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Brainard

Japanese yen rises despite GDP declineThe Japanese yen hit its highest level since August 29th, as the currency powers higher. In the North American session, USD/JPY is trading at 139.17, down 0.53%. The US dollar can't find its footing, and even a soft GDP reading out of Japan hasn't put a dent in the current yen rally. The economy declined in the third quarter for the first time in a year. GDP fell by 1.2% YoY, much weaker than the consensus of a 1.1% gain and the 4.6% gain in Q2. The usual suspects were the drivers of the decline in GDP - weak global growth and rising inflation. In addition, the weak yen, which recently fell to 32-year lows, has contributed to higher prices. The yen has reversed its fortunes since the unexpectedly soft US inflation report and has soared 6.4% in November. The investor exuberance which sent the stock markets flying last week appears to have subsided. Investors jumped on the soft inflation report, as risk sentiment soared and the US dollar retreated. Fed members have responded by sending a hawkish message to the markets, as any dovish signals could complicate its battle to bring down inflation. Fed Vice Chair Brainard said on Monday that she was in favor of slowing the pace of rate hikes, but that further hikes were still required in order to bring down inflation. Brainard's stance was echoed by Fed member Waller who said that while the Fed may ease up on the size of future rate hikes, it should not be seen as a "softening" in its fight against inflation. Waller added that the 7.7% inflation reading in October was "enormous", in sharp contrast to the markets, which chose to focus on the fact that inflation fell sharply from 8.2% in September. The Fed is committed to curbing inflation and is far from convinced that inflation has peaked, even though inflation appears to be trending in a downward direction. USD/JPY is testing support at 1.39.66. Below, there is support at 138.69 There is resistance at 140.88 and 141.61
by OANDA
Pound soars despite weak job dataThe British pound has reversed directions on Tuesday and posted sharp gains. In the European session, GBP/USD is trading at 1.1902, up 1.22%. The pound has punched above 1.19 for the first time since August 19th. The UK employment report was soft, with unemployment ticking higher to 3.5%, up from 3.4%. Unemployment rose by 3.3 thousand, down from 3.9 thousand but well off the consensus of -12.6 thousand. The BoE will be most concerned about the increase in wage growth, which will create even more inflation, at a time when inflation is above 10%. Wages excluding bonuses rose to 5.7%, up from 5.5% and ahead of the consensus of 5.6%. There isn't much slack to speak of in the labour market and the BoE will be under pressure to continue hiking aggressively, even though this will hurt the struggling UK economy. The Fed may be breathing a bit easier today, as the exuberance which sent the stock markets flying last week appears to have subsided. Investors jumped all over the soft inflation report, as risk sentiment soared and the US dollar retreated. Fed members have responded by sticking to a hawkish script, as any dovish signals could complicate its battle to bring down inflation. Fed Vice Chair Brainard said on Monday that she favored slowing the pace of rate hikes, but that further hikes were required in order to bring down inflation. Brainard's stance was echoed by Fed member Waller who said that while the Fed may ease up on the size of future rate hikes, it should not be seen as a "softening" in its fight against inflation. Waller added that the 7.7% inflation reading in October was "enormous", a possible rebuke of the exuberance shown by investors to the drop in inflation. . GBP/USD has broken through several resistance lines today. The next resistance lines are 1.2030 and 1.2224 1.1703 and 1.1648 are providing support
by OANDA
SHORT DXY/ USD: BRAINARD FAILS TO TOW THE HAWK LINE (SPEECH)*Voting member Lael Brainard maintained her mildly dovish stance, with the headline quotye being "case to tighten policy preemptively is less compelling" perhaps the most indicative of the dovish sentiment. The rest of the comments remained neutral-downbeat and didnt echo JPM's CEO's comments of "A 25-basis-point increase is a drop in the bucket," and Let's just raise rates. You don't want to be behind the eight ball on this one, and I think it's time to raise rates.". Likely to have little effect on the overall decision and hawks imo are a lost cause here, eyeing the 20% of hikes priced into USD downside seems much more realistic than speculating on the tail-end possibility that the Fed rise rates. As posted earlier I maintain my view that $yen shorts above 100 are valid, and GBPUSD longs to 1.34/5 also fall in line and will likely be reached on a fed no hike. Cross asset wise I still maintain my broad view of SPX towards 2000 and gold towards 1400. I think DXY has 92 potential on a fed no hike. On the note, Fed funds have sold off somewhat from 24% implied sept hike to 15% presently, this has helped buoy risk markets with SPX up 0.7% and nasdaq outperforming up 1.28%. Brainard speech highlights: Fed's Brainard: Case to Tighten Policy Preemptively Is Less Compelling Brainard: Effect on Inflation of Further Labor Market Gains Likely To Be Moderate, Gradual Brainard: Natural Rate of Unemployment Could Move Even Lower Brainard: More Concerned About Undershooting Than Overshooting on Inflation Brainard: Phillips Curve Appears Flatter Today Than Previously Brainard: Asymmetry in Risk Management Counsels Prudence in Removing Policy Accommodation Brainard: Japan, Eurozone Experience Suggests Prolonged Weakness in Demand Very Difficult to Correct Brainard: Labor Market Developments May Imply Room for Further Improvement Brainard: Progress Toward Full Employment Likely to be Somewhat Gradual Brainard: Raising Inflation Target, Nominal Income Target, Negative Rates Merit Further Study Brainard: Better to Tilt Policy Against Downside Risks Than to Raise Rates Preemptively Brainard: Low Neutral Rate Means Current Policy Rate Less Accommodative Than Previously Brainard: Chinese Growth Likely to Continue to Slow, Downshift Could Pose Risks Brainard: Disinflation Pressure, Weak Foreign Demand Likely to Weigh On Outlook Brainard: Spillover from Adverse Foreign Shocks More Powerful Than Previously Brainard: Japan Example Highlights Risk of Low-Growth, Low-Inflation Environment Brainard: Fed Policy Should Minimize Risk of U.S. Slipping Into Such a Situation Brainard: US Should Avoid Situation of 'Trapped' Japan, Eurozone Fed's Brainard: May Be Additional Slack In Labor Market Brainard: Given Low Inflation Pressure, There Is Space To Continue Reducing Slack Brainard: Still Room For Drawing Prime-Age Labor Force Back To Work
TVC:DXYShort
by QuantumLogicTrading
5
SHORT DXY/ USD: BRAINARD FAILS TO TOW THE HAWK LINE (SPEECH)Voting member Lael Brainard maintained her mildly dovish stance, with the headline quotye being "case to tighten policy preemptively is less compelling" perhaps the most indicative of the dovish sentiment. The rest of the comments remained neutral-downbeat and didnt echo JPM's CEO's comments of "A 25-basis-point increase is a drop in the bucket," and Let's just raise rates. You don't want to be behind the eight ball on this one, and I think it's time to raise rates.". Likely to have little effect on the overall decision and hawks imo are a lost cause here, eyeing the 20% of hikes priced into USD downside seems much more realistic than speculating on the tail-end possibility that the Fed rise rates. As posted earlier I maintain my view that $yen shorts above 100 are valid, and GBPUSD longs to 1.34/5 also fall in line and will likely be reached on a fed no hike. Cross asset wise I still maintain my broad view of SPX towards 2000 and gold towards 1400. I think DXY has 92 potential on a fed no hike. On the note, Fed funds have sold off somewhat from 24% implied sept hike to 15% presently, this has helped buoy risk markets with SPX up 0.7% and nasdaq outperforming up 1.28%. Brainard speech highlights: Fed's Brainard: Case to Tighten Policy Preemptively Is Less Compelling Brainard: Effect on Inflation of Further Labor Market Gains Likely To Be Moderate, Gradual Brainard: Natural Rate of Unemployment Could Move Even Lower Brainard: More Concerned About Undershooting Than Overshooting on Inflation Brainard: Phillips Curve Appears Flatter Today Than Previously Brainard: Asymmetry in Risk Management Counsels Prudence in Removing Policy Accommodation Brainard: Japan, Eurozone Experience Suggests Prolonged Weakness in Demand Very Difficult to Correct Brainard: Labor Market Developments May Imply Room for Further Improvement Brainard: Progress Toward Full Employment Likely to be Somewhat Gradual Brainard: Raising Inflation Target, Nominal Income Target, Negative Rates Merit Further Study Brainard: Better to Tilt Policy Against Downside Risks Than to Raise Rates Preemptively Brainard: Low Neutral Rate Means Current Policy Rate Less Accommodative Than Previously Brainard: Chinese Growth Likely to Continue to Slow, Downshift Could Pose Risks Brainard: Disinflation Pressure, Weak Foreign Demand Likely to Weigh On Outlook Brainard: Spillover from Adverse Foreign Shocks More Powerful Than Previously Brainard: Japan Example Highlights Risk of Low-Growth, Low-Inflation Environment Brainard: Fed Policy Should Minimize Risk of U.S. Slipping Into Such a Situation Brainard: US Should Avoid Situation of 'Trapped' Japan, Eurozone -- Market Talk
NASDAQ:METAShort
by QuantumLogicTrading