How to open up 50bp Sep cut

Monica Kingsley Monicakingsley

S&P 500 pushed up early in the session only to reverse and deliver some intraday short gains. Basing around 5,615 support, this has held – but instead of data today (apart from oil, it‘s only Fed minutes), we‘ll get some stark job market revisions. As these haven‘t moved markets much yesterday, will they do so today?

Buyers may feel a bit disconcerted by seening a little red Tuesday – and the great swing ride following the post-yen Wednesday‘s flush and Thursday‘s unemployment claims being promptly bought, resulted in hefty 273 ES point gain for daily publications clients.

For a long time, I‘ve been writing about the disconnect between household and establishment surveys as regards job creation. And aligning the two is what gives dual mandate cover for 50bp Sep cut, the odds of which are merely 30% (and at least 75bp combined by Nov are just 49% - in effect it‘s Nov 50bp cut that is seen as more probable).

Let‘s have a look at the VIX and the state of the bond market – cautious sentiment before central banking moves. How much of the bullish price action and sentiment of disbelief has been worked off – how close are we to the next rally?

Author

Monica Kingsley

Monicakingsley

Monica Kingsley is a trader and financial analyst serving countless investors and traders since Feb 2020.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.