The U.S. Dollar is up against most of its major trading peers this morning ahead of international trade economic indicators and speeches from several members of the Fed this afternoon.
Overview
Data has been the name of the game since the longest Government shutdown in history came to a close last week, and that theme remains in place today.
The Fed’s dual mandate is facing pressure from both sides as the labor market appears to continue to weaken and inflation continues to rise. Fed minutes for the October 28th meeting will also be released today, giving traders some insight into how policymakers feel about the path ahead. Richmond Fed President Barkin has indicated that forthcoming data will guide the December meeting and any decision to potentially cut rates further. As of this morning, the probability of a further 25bps cut sits at 45.4%.
What to Watch This Week…
- Fed Minutes, 2pm
- Monex USA Online is always open
EUR ⇑
The Euro is up against the Buck this morning, one of a few currencies still holding to gains along with Mexican Peso. The appreciation comes as a result of the Euro-Zone October Consumer Price Index numbers released this morning, which showed a slowing in the YoY inflation rate, and which met expectations on other figures. The next meeting of the European Central Bank is scheduled for December 18th, where it is very likely that Lagarde and Co. will maintain the current 2.0% rate.
JPY ⇓
The Japanese Yen continues to sit near a 35-year low against the Greenback. Traders are bracing for Prime Minister Takaichi’s rumored USD110 Billion fiscal stimulus package and have sent Japanese Government Bond yields soaring as a result. 10-year yields are at their highest point since the 2008 Recession, and 30-year yields have reached fresh all-time highs. While policymakers have agreed to watch the market with a sense of urgency, the eyes of traders remain fixed on the December 18th Bank of Japan meeting, where there is a 33.7% probability of a 25bps hike.
