Amid the absence of economic data during the opening session of the week yesterday, Monday, the markets interacted with the reappointment of the current US Federal Reserve Chairman Jerome Powell for another four years, as were expectations, to end a chapter in the financial markets side by side with a state of uncertainty and possible scenarios that would come with Brainard winning the Fed presidency, despite the similarity points of view between them.
Powell’s continuity in his current policy of starting to tighten monetary policy and maintaining the current management of the Fed reassured the markets of any concerns about changing monetary policy in the future, as the high-risk assets rose during the session.
A large percentage of the US dollar’s gains come from rising bets, according to some analysts and market estimates, from the speed of the Fed’s monetary policy tightening.
Expectations rise with time that the US Federal Reserve will raise interest rates even before the middle of next year. Federal Reserve Board member Christopher Waller and Fed Vice Chairman Richard Clarida, as well as St. Louis Federal Reserve Chairman James Bullard, said at the end of last week and on the weekend that the US Federal Reserve should accelerate the pace of reducing bond purchases (currently withdrawing $15 billion per month) and thus markets started In pricing an early hike in the US interest rate.
The US Federal Reserve’s preferred indicator for measuring inflation, PCE, or personal consumption expenditures index, which will be released tomorrow, Wednesday, in addition to the minutes of the US Federal Reserve meeting on November 3, is expected to support the continuation of the US dollar’s gains, especially if the PCE rises stronger than expected.
US bond yields rose at the highest daily pace in two weeks after Biden’s statements yesterday, as 10-year yields regained the 1.60 levels, an increase of more than 2%, and are now trading at 1.62, while the two-year yields rose to the highest level since March 2020 to support the rises of the US dollar.
The general index of the US dollar is trading at levels of 96.53 this morning, Tuesday, which is a new high for the current year, after gains of 0.46% on the first day of the week yesterday, Monday.
The euro against the US dollar is trading at 1.1223 levels, the lowest since June 2020, down more than 100 points since the beginning of the week yesterday, Monday, amid anticipation of the manufacturing and services PMI for the euro zone after less than two hours.
The Japanese yen, in turn, is trading at its lowest level since March 2017 against the US dollar, the highest levels of 115, after losing 86 points yesterday, Monday, affected by the rise in the US dollar.
06/11/2024
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