The change in their forecast fits more with what the consensus is gearing towards now. As for next year, Nomura sees the Fed delivering 25 bps rate cuts each in March, June, and September.Markets wanted something more from Fed chair Powell but he played it safe and labelled yesterday’s move as a “risk management” cut. He did also acknowledge that the decision was more focused on labour market risks, with risks to inflation having diminished recently but still not enough to be discarded. So, there’s some giving and taking but all in all it seems to be fitting with market pricing of ~44 bps rate cuts by year-end. This article was written by Justin Low at investinglive.com. Source: investinglive.com (Read Full Article)

It’s no surprise that tech shares are leading the charge, with Nasdaq futures marked up by 0.7% currently. Wall Street saw a mixed showing yesterday as tech shares fell while the Dow closed higher by 0.6%. But if you look at the intraday moves, things could’ve gotten a whole lot worse for equities and risk sentiment.When Fed chair Powell did not offer too much of a dovish take, there was some heavy selling. However, dip buyers quickly stepped in as they stuck to their guns in expecting the Fed to continue to deliver rate cuts in October and December.The dot plots remain a tough one to decipher. That besides the one outlier, in which we know is Miran is wanting 50 bps rate cuts at every meeting by year-end. But at the balance, it shows 10 policymakers expecting two or more rate cuts with 9 policymakers seeing just the one more.The divide is going to make it tough to pick a side for now, with Fed chair Powell playing it safe in calling this a “risk management” cut while reaffirming a more data-dependent approach.But if there’s one lesson to be heeded since the post-Covid era, it is that equities will always find a way to spin the narrative to their liking. It feels now that the onus is on US data to prove market players wrong, rather than having to account for the risk of stronger inflation and labour market data.The mantra these days seems to be buy first, worry later. And this time might not be so different. This article was written by Justin Low at investinglive.com. Source: investinglive.com (Read Full Article)

There is arguably just one to take note of on the day, as highlighted in bold below.There’s been a mixed reaction to the Fed so far as broader markets are still digesting the developments from yesterday. The dollar is firmer but stocks look to be bouncing back, though it doesn’t take much to convince dip buyers these days. But amid a slight bounce back in the dollar, we are seeing large expiries in EUR/USD come into play.The one today will be at the 1.1800 mark and could very well play a part in locking price action and acting more as a magnet. That as traders continue to duke it out in trying to figure out the balance in which broader markets are leaning after the Fed.That said, the Fed decision is one that seems to have something for everyone. So, it might be tough to tip the scales too heavily on the hawkish or dovish side with what’s priced in by markets at this stage.For more information on how to use this data, you may refer to this post here.Head on over to investingLive (formerly ForexLive) to get in on the know! This article was written by Justin Low at investinglive.com. Source: investinglive.com (Read Full Article)

So, the Fed moved to cut interest rates by 25 bps yesterday. Let’s summarise the key parts of the decision and Fed chair Powell’s press conference.The decision only saw Trump nominee Miran as the sole dissenter, voting for a 50 bps rate cutBowman and Waller did not join the more dovish camp, which was a possibilityFed chair Powell reaffirmed that “there wasn’t widespread support at all for a 50 bps rate cut today”Latest dot plot projection shows 10 members expecting at least two more 25 bps rate cuts this yearMeanwhile, 9 members are expecting just one more 25 bps rate cut by year-endThe balance is skewed by Miran, who has his 2025 dot at 2.875% – in wanting a 50 bps rate cut at every meeting2026 dot plot median seen at 3.4%, 2027 dot plot median seen at 3.1% – both meeting expectationsFed chair Powell labels the decision as a “risk management” cutAdds that labour market risks were the focus of the decision, as inflation risks are “a little bit less” nowBut he also goes on to maintain that the Fed is on a data-dependent path, taking things meeting by meetingSo, what can we make of all of that by putting everything together?In short, the Fed may yet still be on track to cut rates again in October and one more time in December. Powell said he did not give his “blessing” to the current market pricing but that doesn’t mean they aren’t going to take that into consideration. Market players are focusing on softer labour market conditions and that is what the Fed acknowledged yesterday.That puts heavy focus on the next non-farm payrolls release on 3 October. If the trend continues, the Fed should be poised to cut rates again next month. But if there is some evidence of a rebound in jobs, that might yet take things off the table.Nothing is a given but the onus is now on US data to prove markets wrong. As things stand, traders are still pricing in ~44 bps of rate cuts by year-end. The balance is skewed closer towards two 25 bps rate cuts than one more 25 bps rate cut currently.The dot plots weren’t as dovish to convince of a more aggressive easing cycle, that despite Miran’s skew. Meanwhile, Bowman and Waller not hopping on the 50 bps bandwagon this week means that policymakers are still heavily contemplating existing economic conditions before really taking a bolder step.The next FOMC meeting decision will fall on 29 October, so we’ll have another month with a full slate of US economic data to digest before getting to that.As far as yesterday’s decision goes, there is a little bit of something for everyone. And that means at the end of the day, there might not be all much to work with given what markets have priced in before the decision.The dollar is firmer for now but nothing to suggest a material turnaround in sentiment, besides a near-term pullback to the more dovish pricing in the run up to the Fed. Meanwhile, equities are still seeing dip buyers step in with conviction as the Fed communique mostly just reaffirms what is already priced in.As mentioned above, it’s more so of a case now that US data has to prove market pricing wrong. Otherwise, there’s not much of a need to overreach and/or overinterpret the FOMC meeting decision this week. This article was written by Justin Low at investinglive.com. Source: investinglive.com (Read Full Article)

Prior CHF 4.59 billion; revised to CHF 4.62 billionThe Swiss trade surplus narrowed slightly in August, with the trend in exports and imports as per the following: This article was written by Justin Low at investinglive.com. Source: investinglive.com (Read Full Article)

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Fundamental OverviewThe USD yesterday weakened across the board on the Fed’s decision but eventually erased all the losses and increased the gains as traders digested all the information and realised it was more hawkish compared to the market pricing. In fact, the dot plot showed that the FOMC projected two more rate cuts for 2025 by a narrow majority, with the rest of officials expecting just one more or even none. Moreover, the Fed projected just one cut in 2026 compared to three that the market was pricing before the decision.Fed Chair Powell then labelled the rate cut as a “risk management” action given the weakening in the labour market data. But overall, he sounded pretty neutral even though he understandably placed more emphasis on the labour market given the two consecutive soft NFP reports. Looking forward, it’s going to be all about the data. Strong data will likely trigger a hawkish repricing in interest rates expectations and support the greenback. On the other hand, weak data will likely continue to weigh on it. On the JPY side, we haven’t got meaningful changes in the fundamentals. The yen has been rallying mostly on the back of the dovish expectations for the Fed. Tomorrow, we have the BoJ decision where the central bank is expected to keep everything unchanged and the focus will be on their forward guidance. USDJPY Technical Analysis – Daily TimeframeOn the daily chart, we can see that USDJPY eventually broke out of the range to the downside and dropped into the major trendline around the 145.60 level. The buyers stepped in with a defined risk below the trendline to position for a rally into the 151.00 handle. The sellers, on the other hand, will want to see the price breaking below the trendline to pile in for a drop into the 143.00 handle next. USDJPY Technical Analysis – 4 hour TimeframeOn the 4 hour chart, we can see that we now have a minor downward trendline defining the bearish momentum. The sellers are likely to lean on the trendline with a defined risk above it to position for a drop into the major upward trendline targeting a breakout. The buyers, on the other hand, will look for a break higher to increase the bullish bets into the 151.00 handle next.USDJPY Technical Analysis – 1 hour TimeframeOn the 1 hour chart, there’s not much else we can add here but if we get a pullback from the downward trendline, we can expect the buyers to step in around the minor support zone at 146.70 to position for a break above the trendline, while the sellers will look for a break lower to increase the bearish bets into the major upward trendline. The red lines define the average daily range for today.Upcoming CatalystsToday we get the latest US Jobless Claims figures, while tomorrow we conclude the week with the Japanese CPI and the BoJ policy decision. Watch the video below This article was written by Giuseppe Dellamotta at investinglive.com. Source: investinglive.com (Read Full Article)

Eurostoxx +0.8%Germany DAX +1.0%France CAC 40 +0.6%UK FTSE +0.1%Spain IBEX +0.6%Italy FTSE MIB +0.8%This comes as US futures are also looking buoyed for the time being, with S&P 500 futures seen up 0.5% currently. The Fed did not lean all too dovishly with their decision yesterday but overall, it had a little something for everyone. In the case of equities, it typically is the case that dip buyers will spin the narrative to their favour one way or another. And for now, it is the fact that the onus is on US data to prove the more dovish market pricing wrong for October and December. This article was written by Justin Low at investinglive.com. Source: investinglive.com (Read Full Article)

Yesterday, ahead of the Fed decision, I wrote down all the things that were expected and all the potential surprises. Let’s see what we got…STATEMENTThe changes in the statement were as expected. The Fed acknowledged the weakening in the labour market and maintained the lines about elevated inflation and uncertainty. So, the only surprise here was the voting split. In fact, the expectations were for two or three members voting for a 50 bps cut (Miran, Waller, Bowman), instead we got just one (Miran). This was slightly hawkish.DOT PLOTThe changes in the dot plot, on the other hand, were definitely more hawkish than the market pricing. The market was pricing 68 bps of easing by year-end (three cuts in 2025) and cumulatively 148 bps of easing by the end of 2026 (three more cuts in 2026). The Fed, instead, matched the market pricing for 2025 but projected just one more cut in 2026. Moreover, if we look at the details, the three cuts in 2025 were reached by a narrow majority. In fact, 10 members projected two or more rate cuts in 2025 and 9 projected one or less. We had 1 member projecting a rate hike (likely Hammack), 6 members projecting no cuts, 2 members projecting one cut, 9 members projecting two cuts and 1 member projecting six cuts (Miran, of course). PRESS CONFERENCEThis is where it’s harder to get an objective view. If we take Powell’s Jackson Hole speech as the baseline, he didn’t really deviated much from that. He understandably placed more emphasis on the labour market given that we got two consecutive soft NFP reports but didn’t sound that much concerned about the recent data saying that it’s mostly because of immigration changes.He also labelled the rate cut as a “risk management” action, which could mean that if the data were to strengthen in the next months, he might focus more on inflation and therefore we could get less than the two cuts projected yesterday.Overall, I think he once again did a great job by balancing everything without leaning on either side, so that the economic data in the coming months will have the final say on their next moves. SUMMARYTo sum up, I don’t think yesterday’s decision can be labelled as dovish at all. I’d say it was neutral to hawkish. It’s just the recent weakening in the labour market data that forced the Fed to move towards neutral as a “risk management” action. This means that if the data were to improve in the next months, the Fed would start to sound more hawkish. This article was written by Giuseppe Dellamotta at investinglive.com. Source: investinglive.com (Read Full Article)

Prior €35.8 billionSlight delay in the release by the source. The current account surplus narrowed in July mostly due to a drop in the surplus for primary income as compared to June. The breakdown shows that surpluses were recorded for goods (€25 billion), services (€12 billion) and primary income (€7 billion). These were partly offset by a deficit for secondary income (€16 billion). This article was written by Justin Low at investinglive.com. Source: investinglive.com (Read Full Article)