Macro Dragon: FOMC Mins & FOMC Speakers Indicate No Cuts Anytime Soon...

Macro Dragon: FOMC Mins & FOMC Speakers Indicate No Cuts Anytime Soon...

Macro 2 minutes to read
Kay Van-Petersen

Global Macro Strategist

Summary:  Macro Dragon = Daily Cross Asset Views


(These are solely the views & opinions of KVP, & do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)

2020-Feb-19

 

Macro Dragon: FOMC Mins + Speakers Show No Cuts...

 

Top of Mind…

  • So overnight we got FOMC mins & quite a bit of constructive dialogue from different FOMC speakers that suggest that cuts are not on the agenda (yet!?). With all that said, even not accounting for a relative world, the US data continues to be strong – this Friday’s Flash PMIs figures could be very interesting to see if that trend is still intact.
  • Still markets did not seem to mind a non-dovish Fed, as the S&P closed +0.47% to 3386, UST were interestingly enough around the same 1.56-1.57% lvls of the previous day.
  • "If I were to guess, I’d guess we’re probably going to sit here for the next three months, next six months, maybe longer" - FOMC's Kashkari 
  • 18 of Mar is the next FOMC meeting, where the overall implied probability for a cut dropped a touch to 8% from 10% prior to the mins.
  • Post US/Iran shuffle & pre Covid-19 we had put out a USDJPY is breaking out higher based on technicals - Macro Dragon: DollarYen Technicals Screaming "Buy, Buy, Buy, Buy"... That break out was arrested with the news of the virus & the initial concerns, think in one session we went from c. 109.13 to c. 108.30, before the mkts went back to pricing in the stimulus measures that were to come.
  • We recently got backing knocking on the 110 lvl again on Feb 12, then again pulled back a touch before the huge spike upwards yest. As USDJPY clocked +1.37% to 111.37 – this is a huge move in currencies, especially when you take into account that 5-10x leverage is considered conservative in FX. Technically we need to stay around these lvls for the wkly close, before we start to open up for the 112 to 114. Does not feel like there is a lot of people in on this trade, if we see a much weaker yen for a sustained period of time, then JP company earns should get some much needed support given the deflationary near-term bubble from Covid-19.

 

On The Radar Today…

(All times are SGT)

  • NZ: PPI input 0.1%a 0.6%e 0.9%p & output 0.4%a 0.5%e 1.0%p
  • AU: Employment 13.5k a 10.0k e 28.7k r, U/R 5.3%a 5.2%e 5.1%p
  • UK: Retail Sales
  • EZ: German PPI, ECB Mins
  • CA: ADP jobs data, House prices
  • US: Crude Oil Inv., CB leading index, Phily Fed Mfg. index

Tmr is really what the econ data this wk is all about, Friday Flash PMIs.

-

It is going to be a phenomenal week, wishing everyone the very best possible day. Let’s all keep our minds & hearts open to the opportunities available & remember, it is not about resources, but resourcefulness & most of all, timing.

All that we desire lies within.  

Namaste,

KVP


Ps. Note the Macro Dragon will be on break from back-end of Feb to early Mar – given a long overdue & upcoming spectacular legacy family trip

-

Anchor Pieces # SaxoStrats:

 

 

Quarterly Outlook

01 /

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
  • FX Outlook: USD in limbo amid political and policy jitters

    Quarterly Outlook

    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Chief Investment Strategist

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

  • FX: Risk-on currencies to surge against havens

    Quarterly Outlook

    FX: Risk-on currencies to surge against havens

    Charu Chanana

    Chief Investment Strategist

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo...
  • Equities: Are we blowing bubbles again

    Quarterly Outlook

    Equities: Are we blowing bubbles again

    Peter Garnry

    Chief Investment Strategist

    Explore key trends and opportunities in European equities and electrification theme as market dynami...
  • Macro: Sandcastle economics

    Quarterly Outlook

    Macro: Sandcastle economics

    Peter Garnry

    Chief Investment Strategist

    Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p...
  • Bonds: What to do until inflation stabilises

    Quarterly Outlook

    Bonds: What to do until inflation stabilises

    Althea Spinozzi

    Head of Fixed Income Strategy

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ...
  • Commodities: Energy and grains in focus as metals pause

    Quarterly Outlook

    Commodities: Energy and grains in focus as metals pause

    Ole Hansen

    Head of Commodity Strategy

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...

Disclaimer

The Saxo Group entities each provide execution-only service, and access to analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Inspiration Disclaimer and (v) Notices applying to Trade Inspiration, Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular, no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Trading in financial instruments carries risk, and may not be suitable for you. Past performance is not indicative of future performance. Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/en-sg/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Markets or its affiliates.

Saxo Markets
88 Market Street
CapitaSpring #31-01
Singapore 048948

Contact Saxo

Select region

Singapore
Singapore

Saxo Capital Markets Pte Ltd ('Saxo Markets') is a company authorised and regulated by the Monetary Authority of Singapore (MAS) [Co. Reg. No.: 200601141M ] and is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Risk Warning to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as Margin FX products may result in your losses exceeding your initial deposits. Saxo Markets does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Markets does not take into account an individual’s needs, objectives or financial situation.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-sg/about-us/awards.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website are not intended for residents of the United States, Malaysia and Japan. Please click here to view our full disclaimer.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.