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Federal Reserve's Recent Interest Rate Hike and its Impact | 2.1The Federal Reserve raised the target range for the federal funds rate by 0.25% to 4.5%–4.75% in its February 2023 meeting. This was a smaller increase than the previous meeting and pushed borrowing costs to the highest level since 2007. Policymakers expect to raise the target range further to reach a restrictive monetary policy that will help bring inflation to 2%. The Fed Chair, Powell, said that the disinflation process has just started and that interest rates are not yet restrictive enough. The dollar index fell 1% after the announcement as investors saw a more dovish tone from the Fed. The future of interest rates will depend on the cumulative impact of monetary policy, economic and financial developments, and the time it takes for monetary policy to affect the economy and inflation. The stock market reacted positively to Powell's comments, with the Dow, S&P 500, and Nasdaq 100 all finishing higher. Companies like Snap, Peloton, and Advanced Micro Devices also had significant changes in their stock prices after reporting earnings. The US Stock Market Index (US30) is expected to be at 32863.60 points at the end of the quarter and 29734.22 in 12 months. The ISM Manufacturing PMI fell to 47.4 in January, the lowest since May 2020 during the height of the COVID-19 pandemic. This indicated a third consecutive contraction in factory activity as companies slowed their output to match demand and prepare for growth in the second half of 2023. Other indicators such as new orders, production, and backlogs of orders also declined, while supplier deliveries and the price index increased. Employment rose slightly, but companies are positive about the future and do not plan to substantially reduce headcounts.
TVC:DXYShort
by TayFx
2
Week ahead 1/29/2023 The Federal Reserve's interest rate decision and the US non-farm payrolls report are the most highly anticipated events in the US, as savvy investors like myself keep a close eye on the economy. The inflation numbers have shown signs of cooling, giving me hope that the Federal Reserve might slow down its monetary policy tightening with a modest 25 bps rate hike on Wednesday. Meanwhile, Europe's central banks are expected to raise interest rates by 50 bps on Thursday, with the European Central Bank and the Bank of England leading the charge in their aggressive campaign against inflation. I'll also be following key reports on growth, inflation, and unemployment for the Euro Area , Germany , Italy , France , and Spain . Across the pond, China 's PMI data will be in the spotlight as the world watches the first gauge of the world's second-largest economy after the government transitioned away from its zero-Covid policy. In Japan , I'll be following consumer confidence figures, housing starts, industrial production, retail sales, and unemployment rate. Down under, Australia will have a packed week with the Ai Group Manufacturing Index for January and retail sales, housing credit, and building permits for December. In New Zealand , I'll be following the December trade balance and fourth-quarter labor market figures. So, to summarize, here's what we have in store this week: US: Federal Reserve's interest rate decision US non-farm payrolls report ISM manufacturing and non-manufacturing PMIs JOLTs Job Openings ADP private payrolls S&P Global PMIs Earnings season with prominent companies reporting (AMD, Meta Platforms, Alphabet, Amazon, Apple, and Qualcomm) Europe: European Central Bank and Bank of England interest rate hike Eurozone inflation, growth, and unemployment reports Germany's prices and trade Euro Area business survey Switzerland's KOF leading indicators Turkey's inflation rate January's manufacturing and services PMIs Asia: China's PMI data Japan's consumer confidence, housing starts, industrial production, retail sales, and unemployment rate India's Union Budget and January PMIs South Korea's inflation and trade data Australia and New Zealand: Ai Group Manufacturing Index and retail sales Housing credit, building permits, and trade balance Labor market figures
UShort
by TayFx
2
USD/CHF for weekend ending 1/29/2023The Swiss franc recently dropped to 0.92 per USD, retreating from its 1-year high of 0.916 on January 16th. As I assess the situation, I consider the outlook of monetary tightening by both the Swiss National Bank and the Federal Reserve . The recent slowdown in Swiss inflation has limited the expectations for further rate hikes by the SNB. According to December's inflation data, the rate fell to 2.8%, below the SNB's target of 3% and market expectations of 2.9%. Despite this, the Chairman of the SNB, Jordan, has stated that further rate hikes shouldn't be ruled out, as second-round inflationary pressures still linger in the country's economy. Last year, the SNB raised its key rate by 175bps, taking borrowing costs out of negative territory for the first time since 2011. According to our neural network based forecasting model, the Swiss Franc is estimated to reach 0.93 by the end of this quarter. The same model and market analysts predict that the Swiss Franc will reach 0.98 in 12 months.
by TayFx
The week of 23 Jan CHFJPY – Opportunity to grab +1300 pips … butBut do you have the discipline and patience?? This pair has been rising since June 2021 but things may be changing now. As my daily chart shows, price has crossed below the 200 SMA and has just retested it from below. Also important is the fact that it has been rejected with a nice pin bar on a daily basis. It is not the nicest looking downtrend but the sequence of lower highs and lower lows is very much present. We have enough evidence that the market is not accepting high prices. As I said above, there is the potential of more than a thousand pips here. But holding on for a long period is not easy, it requires: - a wide stop loss say +300 pips (to be above 143.10) - total belief in this trade for a few months. - the ability to see the market go against you multiple times. - patience to hold the trade for an extended period of time. - overcome the urge to move the stop to break even too early. If you can do all that, this may be a great opportunity to obtain massive profits. This may be an early stage of a downtrend and if it continues and strengthens, it could last a long time. Otherwise, hold that bearish bias for several months and look to take multiple smaller trades as this pair makes its way to the downside. Nothing is 100% in trading, but I have a high degree of confidence in this trade. As always, use sound money and risk management and stay patient in all your trades. If you like my analysis, please give it a “thumbs up” and follow me to get even more awesome content. What do you think about this trade idea? Please comment and share your thoughts!!
Short
by Trading_Vista
4
Opportunities in the CHF/JPY 24/01/2023Upon analysing the market, we have identified an opportunity in the CHF/JPY currency pair. A thorough examination of the 4-hour chart reveals that this pair has been adhering to a downtrend, utilizing it to drive momentum to the downside. Following a decline of over 650 pips, the price appears to have undergone a corrective move to the upside, which can also be referred to as an ABC pattern. This move has created a slope support, which has now been breached. Additionally, we can observe the MacD weakening and transitioning downwards. We believe that taking profit at around 138.85 then 135.75 would be a wise decision.. Subscribe to Substack to receive a FREE newsletter about possible opportunities in the market as well as understandable and relevant news in the market for all level of traders.
by BTCTIMELAPSE