Daily Market Update

Speakers from the Federal Reserve throughout the week have made it clear that Jerome Powell remains on the more conservative side of the FOMC. Among them, New York Fed Chair Williams – a noted dove among the committee – did not rule out the possibility of a future 50 basis point increase. Since Friday, however, market expectations for the Fed’s terminal interest rate have not changed around 5.1%.

This morning US jobless claims crept back up after several weeks of decline, showing a small amount of ease in a tight labor market even after last week’s non-farm payroll report. Though not a huge increase, the Fed may be able to read these numbers with some relief.

With little in the way of hard data on the docket today and tomorrow, markets are attempting to operate off sentiment alone, producing very mixed outcomes in FX pricing. As the Fed attempts to navigate data points seemingly in conflict with one another over the last few weeks, the March meeting will be critical in determining the path forward for the U.S. Dollar.

What to Watch Today…

• No major economic events are scheduled for today
• Monex USA Online is always open

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EUR ⇑

The Euro gained against the greenback overnight and through this morning as German CPI data showed a small amount of relief from the relentless inflation the region has experienced. Though still coming in quite high, the year-over-year inflation figure hit below expectations, sending EUR prices steadily upward through the European morning session and retracing yesterday’s losses. More than one governor from the ECB has stressed the need for continued tightening beyond March’s scheduled 50 basis point hike.

 

GBP ⇑

Pound Sterling prices rose this morning amidst improving global risk sentiment and some words from Bank of England Governor Andrew Bailey. In speaking to the Treasury Committee in Parliament, Bailey said he expects inflation to fall sharply this year. As the UK very narrowly avoided entering a technical recession last quarter, the central bank faces a complicated path forward to not damage the larger economy too badly while reining in record-high inflation.