Fed's Rate-Cut Debate Intensifies, Dollar Tumbles Amid Renewed 50bps Speculation
| Action Insight Daily Report 9-13-24 |
Fed's Rate-Cut Debate Intensifies, Dollar Tumbles Amid Renewed 50bps Speculation |
Dollar fell sharply overnight as the probability of a 50bps rate cut by Fed next week increased significantly. According to fed fund futures, the odds of a half-point cut now sit at around 40%, a notable jump from just 14% the day before. Market participants had widely assumed that Fed was firmly on track for a smaller 25bps cut. However, recent developments have brought a more aggressive rate reduction back into consideration. After last week's solid non-farm payrolls report and the higher-than-expected core inflation data earlier this week, most market participants had ruled out the likelihood of a 50bps cut. However, fresh commentary from key financial outlets, such as the Wall Street Journal and Financial Times, has flipped the narrative. WSJ's Nick Timiraos, often referred to as the "Fed Whisperer," wrote that Fed now faces a "rate-cut dilemma" — whether to "start big or small." He highlighted the Fed's nervousness about keeping rates elevated for too long, particularly as evidence mounts that higher borrowing costs are indeed cooling the economy as intended.... |
USD/JPY Daily Outlook Daily Pivots: (S1) 141.35; (P) 142.20; (R1) 142.66; More... USD/JPY is staying above 140.70 temporary low despite current dip, and intraday bias stays neutral first. Outlook remains bearish as long as 147.20 resistance holds. On the downside, break of 140.70 will resume the fall from 161.94 to 140.25 support, and possibly to 139.26 fibonacci level too. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 22:30 | NZD | Business NZ PMI Aug | 45.8 | 44 | | 04:30 | JPY | Industrial Production M/M Jul F | 2.80% | 2.80% | | 09:00 | EUR | Eurozone Industrial Production M/M Jul | 0.20% | -0.10% | | 12:30 | CAD | Capacity Utilization Q2 | 78.40% | 78.50% | | 12:30 | CAD | Wholesale Sales M/M Jul | -1.10% | -0.60% | | 12:30 | USD | Import Price Index M/M Aug | -0.20% | 0.10% | | 14:00 | USD | Michigan Consumer Sentiment Index Sep P | 68 | 67.9 |
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