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What to Expect in US Inflation Data for July 2023
Consensus data, Headline inflation 3.3, Core CPI 4.8 Scenario 1 If the data prints higher than expected that is core CPI at 5.0 and Headline inflation at 3.5 market participants might interpret inflation as being sticky this will influence them to price for another rate hike either in September or N
What to watch in the todays Fed FOMC
What is the FED view on inflation? Does it expect it to rise compared with June report? What is the FED view on fed funds rate? Does it expect a raise or fall compared with June report? Hawkish Fed FOMC is made up of 18 members. · More than 10 members expect core P
Short term rally on the USDCAD pair could be on the horizon.
The US economy is showing resilience, especially in the services sector. The US consumer sentiment is optimistic, being supported by wage gains and falling inflation expectations. The core PCE is at 4.6 percent which is above the 2 percent FED target. Canada's inflation is falling faster than the US
The rally in the EURUSD will peak in the short term.
Currencies have a positive correlation with expected future interest rates. Bonds yields on the short end of the curve are primarily driven by interest rates expectations which means that short-term bond yields embed expected future interest rates. Currency pairs represent two nations so it’s impera
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Is euro going to experience more pain?
The yield spread between Germany 2-year bond yields and United States equivalent has been widening in favor of the dollar for the last two trading days. Historically the yield spread leads or moves in tandem with exchange rates. Europe is more exposed to global recession due to its economy being mor
Is euro going to experience more pain?
The yield spread between Germany 2-year bond yields and United States equivalent has been widening in favor of the dollar for the last two trading days. Historically the yield spread leads or moves in tandem with exchange rates. Europe is more exposed to global recession due to its economy being mor
More pain is in sight for the euro
#OPINIONLEADER# To curb persistent inflation the European central bank (ECB) is expected to hike interest rates by 50 basis points in their July meeting and abandon their negative rates policy that has existed for more than a decade. Interest rate swaps are pricing in 140 basis points
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Is Bitcoin a haven asset?
A safe haven asset retains its value or appreciate over time making it a good hedge against inflation and stock market turmoil. However, Risk assets tend to fall during a crisis. Stocks are considered risky while Bitcoin is considered a safe haven asset because its supply is capped. Recent events ar
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2/10 year yield curve has inverted what now?
Yields on long maturity bonds are driven by future growth and inflation expectations. When bond yields of different maturities are plotted on a curve they depict term structure of interests rates. Investors fear a behind the curve FED will tighten policy aggressively causing a recession. Fed funds f
2/10 year yield curve has inverted what now?
Yields on long maturity bonds are driven by future growth and inflation expectations. When bond yields of different maturities are plotted on a curve they depict term structure of interests rates. Investors fear a behind the curve FED will tighten policy aggressively causing a recession. Fed funds f
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Why is Yen weakening sharply?
#OPINIONLEADER# Japan is a net importer of commodities. Commodity prices are soaring due to supply disruptions created by Russia-Ukraine war. Most of this commodities are priced in dollars. As the value of this exports go up more yen gets sold for dollars to facilitate tra
Why is Yen weakening sharply?
#OPINIONLEADER# Japan is a net importer of commodities. Commodity prices are soaring due to supply disruptions created by Russia-Ukraine war. Most of this commodities are priced in dollars. As the value of this exports go up more yen gets sold for dollars to facilitate tra
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