The holiday shortened week in the US yielded little to change our macroeconomic forecasts in either direction, although a weaker than expected PMI release did help currencies worldwide rally against the Dollar.
Yet, fears of Trump's tariffs remain the core driver of currency markets. For now, the onslaught of executive orders has yet to result in any tariff increases, which has calmed nerves somewhat, as has hints of no more than 10% trade duties on China.
This week’s Federal Reserve meeting could be overlooked by market participants.
Futures markets are effectively assigning zero chance of another rate reduction on Wednesday, and we wholeheartedly agree.
For now, we expect the FOMC to adopt a patient approach, as it awaits more details of Trump’s tariff and tax plans before it delivers any concrete guidance.
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
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