Talking Points:
- This week saw the first rate hike from the Federal Reserve in 2018, along with the first press conference from new Fed Chair, Jerome Powell. If one thing was clear, it’s that Mr. Powell is not looking to continue with the same traditions of predecessors Ben Bernanke and Janet Yellen. Thus far, it does not look as though US stocks have been overly-positive that the fast and loose days of old may show up again, as US equities pulled-lower yesterday in the wake of that rate decision. A bit of support has shown in the S&P in the overnight session.
- The US Dollar[1] remains in a range within a longer-term expanding range, making for little fanfare amongst major pairs at the moment. But – Japanese Yen[2] strength has continued to show, likely in response to a continuation of pressure between US/China relations on the topic of tariffs combined with the continued rise in Japanese inflation.
- Next week is the final week of Q1, and this brings both month-end and quarter-end flows. Peculiar things can happen here, so be especially careful with weekend risk as we move towards today’s close. If you’re looking to improve your risk management as part of your approach, check out Traits of Successful Traders[3] research. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide[4].
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FOMC Hikes Rates for First Adjustment of 2018 – More on the Way
This was a big week across global markets. We got the Federal Reserve’s first rate hike of the year[6], we saw a hawkish type of outlay at the Bank of England, and Washington DC remained active, continuing to furnish a series of themes that have shown various stages of pull on market dynamics. But, perhaps the most interesting items of this week weren’t in the headlines at all, and may even go unnoticed by many that don’t live on the charts; and that’s the fact that risk markets continue to pull as if some stressor in the environment looms large with bearish potential. This can be evidenced from the sell-off in US stocks, strength in the Japanese Yen and Swiss Franc[7] and continued malaise around the US Dollar that’s seemingly shown in the face of both bullish and bearish drivers on the currency[8].
Below, we parse through some of these themes in relevant markets of interest; but before we get there we’re looking at next week’s Economic Calendar[9], which is rather light all factors considered. March has been a busy month so far, and next week sees the data releases calm; which brings along an excellent time
