HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
Vantage information and reviews
Vantage
85%
MultiBank Group information and reviews
MultiBank Group
84%

Stocks slide, dollar soars as rate cut bets take another hit


16 April 2024 Written by Raffi Boyadjian XM Investment Analyst Raffi Boyadjian

The problem with a hot economy

As markets awaited Israel’s response to Iran’s missile and drone assault over the weekend, Fed rate cut expectations took centre stage again. Specifically, it is the latest narrative of US exceptionalism that is unsettling markets as the still hot economy is wreaking havoc on rate cut hopes.

Retail sales in America surged by 0.7% month-on-month in March, handily beating forecasts of 0.3%, while the prior month’s figure was revised up in yesterday’s report.

The Fed’s Daly was the first to respond to the latest upbeat readings, warning against acting urgently to cut rates. The focus on Tuesday will be on the Fed Chair as Powell is scheduled to speak at 17:15 GMT.

Rate cut bets have been sharply scaled back in recent weeks and have even fallen below the Fed’s dot plot projection of three rate cuts. The latest pricing in Fed fund futures points to less than two cuts in 2024, with the first not anticipated before September.

Dollar stands tall as Wall Street wobbles

The US dollar climbed to fresh five-and-a-half-month highs against a basket of currencies on the back of the strong retail sales numbers, extending its gains today.

Equities and bonds were sold off, with the 10-year Treasury yield surpassing 4.60%, while Wall Street’s main indices slid by between 0.65% and 1.65%.

Having until recently resisted the significant repricing of Fed rate cut expectations, the bull market in US stocks is finally showing signs of stress, and with the earnings season getting off to a mixed start, there’s not much support at the moment.

The earnings spotlight on Tuesday will fall on Morgan Stanley and Bank of America.

China’s GDP data fails to impress

The selloff in equities has broadened to Asia and Europe today, with investors fretting not just about the prospect of only modest rate cuts in the US, but also about China’s struggling economy.

Chinese economic growth accelerated slightly to 5.3% y/y in the first three months of the year, but figures for March cast doubt about future growth as industrial output and retail sales slowed sharply.

Gold pulls back as yen on intervention watch

The strong greenback, meanwhile, weighed on gold prices. With tensions in the Middle East elevated and the situation likely remaining extremely fragile for some time, a stronger US currency will probably only go so far in holding the precious metal back.

A safe haven that has failed to benefit at all from the recent geopolitical risks is the Japanese yen, even as Israel looks sure to respond in some manner to Iran’s attack. The yen continues to fall to fresh 34-year lows against the dollar, breaching the 154 level, as investors don’t see Japanese yields catching up with US yields anytime soon.

The threat of intervention grows, however, the closer the dollar gets to 155 yen. But so far, there have been no clear signs of imminent action from Japanese government officials.

By XM.com

#source


RELATED

Dollar awaits NFP, euro traders keep gaze locked on politics

The US dollar is pulling back against all its major peers today, perhaps as traders are adopting a cautious stance ahead of tomorrow’s nonfarm payrolls report, especially after the ADP report revealed that the private sector gained less jobs than expected.

5 Dec 2024

Thin liquidity and month-end could keep the dollar under pressure

Pending a major development, the week is likely to finish on a quiet note as the US markets will open today but close early. With Fed speakers taking a back seat this week, geopolitics dominated the headlines.

29 Nov 2024

Nvidia fails to lift markets, dollar stands tall

Equity markets continue to trade with lackluster momentum, struggling for direction even after AI giant, Nvidia, announced outstanding third quarter earnings.

21 Nov 2024

Gold edges up amid Ukraine tensions, stocks and dollar subdued

Gold rebounds as Biden lets Ukraine use long-range missiles on Russia. Yen slips again after Ueda offers no clues on December hike.

18 Nov 2024

Wall Street loses more steam as Powell not in a hurry to cut rates

Fed rate cut expectations were dramatically pared back on Thursday after Fed chief, Jerome Powell, rounded up the week’s hawkish rhetoric by adding to the sense of caution about the pace of easing.

15 Nov 2024

Dollar extends gains, bitcoin soars but stocks lose momentum

Speculation about the expected impact of Donald Trump's policies continues to dominate the market theme, as investors await details about who will be in Trump's cabinet. The US dollar advanced to four-month highs against a basket of currencies.

12 Nov 2024

Fed delivers rate cut, stocks rally but dollar not impressed

The market is convinced that another 25bps rate cut will be announced on December 19, as it is currently assigning a 92% probability to this outcome.

8 Nov 2024

Markets hold their breath as America votes

The countdown for the biggest event of 2024 is finally over as in a few hours around 80 million registered voters will cast their vote across the United States.

5 Nov 2024

Wall Street lifted by earnings as election jitters boost gold

Despite pledges for lower taxes and less regulation, markets are nervous about the prospect of Trump returning to the White House amid his chaotic and confrontational style of leadership.

30 Oct 2024

Oil slumps after Israel's attack; yen slips on Japan election shock

Oil prices tumbled as trading got underway on Monday, opening with a gap down as investors responded to Israel’s retaliatory attack against Iran on Saturday.

28 Oct 2024

Stocks under pressure amid US election jitters, dollar extends gains

The rally on Wall Street came to an abrupt end this week as uncertainty about the looming US presidential election as well as about the pace of Fed rate cuts undermined confidence in risk assets.

24 Oct 2024

Gold and dollar edge up as markets bet on Trump win

Gold extended its record streak at the start of the new trading week as investors increasingly bet on Donald Trump winning the US presidential election on November 5.

21 Oct 2024

US dollar could benefit from an unexciting ECB meeting

The euro remains on the back foot as it continues to underperform the dollar. The pair has dropped to the lowest level since August 2 with October shaping up to be the weakest month for euro/dollar since May 2023.

17 Oct 2024

Stocks under pressure by chipmakers, pound slips on CPI drop

Equity markets suffered a setback on Tuesday after Dutch semiconductor giant, ASML, sparked panic about the demand outlook for chips when it accidentally published its earnings report a day early.

16 Oct 2024

Dollar edges up, stocks muted as China stimulus underwhelms

Chinese officials unveiled more measures to shore up the country’s embattled property sector while also pledging further support for businesses and consumers in two separate announcements on Saturday and Monday.

14 Oct 2024

Wall Street hits new record after Fed minutes, CPI eyed next

Fed minutes show split over September cut but Wall Street rallies; Dollar eases from near 2-month high as focus turns to CPI report; Gold and oil steadier after recent losses

10 Oct 2024

Risk appetite ebbs as markets fret over China stimulus, Fed rate cuts

Chinese traders returned from a week-long holiday today and hopes were high that the government would unleash more big packages to support the flagging economy.

8 Oct 2024

Will the dollar or stocks smile after the non-farm payrolls print?

Spotlight falls on the key US labour market data. Non-farm payrolls to rise by 140k, but could surprise to the upside. Dollar to enjoy a strong set of data, equities prefer weaker prints. Euro suffering continues, while both gold and oil advance.

4 Oct 2024

Markets maintain upbeat mood ahead of PCE inflation

China stimulus and rate cut bets propel stocks higher. Dollar caught in choppy trading as crucial inflation data awaited. Yen surges as new LDP leader in favour of rate hikes set to become PM.

27 Sep 2024

Euro sinks on poor PMIs, dollar firms ahead of Fedspeak

Eurozone PMIs dip into contraction zone, euro takes a dive. Stocks mixed as weak PMIs offset optimism about China stimulus. Dollar edges up as after Waller comments. Powell and PCE inflation eyed next.

23 Sep 2024


Editors' Picks

Regulation Matters: Why a Licensed Forex Broker Should Be Your Top Priority

Choosing a regulated broker is not just a matter of preference; it is a necessity for safeguarding your investments and ensuring that you trade in a fair and secure environment.

Automating Success: The Benefits and Risks of Using Forex Expert Advisors

This article explores the benefits and risks associated with using Forex Expert Advisors, providing insights into how traders can maximize their potential while mitigating potential downsides.

Best Forex Brokers 2024

By prioritizing factors such as overall rating, regulatory compliance, trading conditions and platform reliability traders can make an informed decision that aligns with their trading needs and aspirations, setting the stage for a potentially prosperous trading journey.

The Top Forex Expert Advisors 2024: Performance, Strategy, and Reliability Review

An annual roundup reviewing the most successful Forex Expert Advisors (EAs) based on their performance, strategies employed, reliability, and user feedback. This piece would provide insights into which EAs have been market leaders and why.

The Evolution of Forex Expert Advisors: Navigating the Path of Technological Revolution

The concept of automated trading has been around for decades, but the accessibility and sophistication of Forex EAs have seen significant advancements in the past few years. Initially, automated trading systems were rudimentary, focusing on simple indicators like moving averages.

Best Forex EAs 2024 – Forex Expert Advisors Rating

Expert Advisors (EAs) Rating features high-quality Free and paid Forex EA most popular on the market today.

XM information and reviews
XM
82%
FP Markets information and reviews
FP Markets
81%
FXTM information and reviews
FXTM
80%
AMarkets information and reviews
AMarkets
79%
Octa information and reviews
Octa
79%
BlackBull information and reviews
BlackBull
78%

© 2006-2024 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.