Two members of the US FOMC made remarks last night suggesting that the Fed might not need to hike rates again this year, sending treasury yields sharply lower and stock markets higher.
- Yesterday two members of the FOMC of the US Federal Reserve made comments suggesting that the recent moves higher by US treasury yields may have effectively tightened monetary conditions sufficiently to make any further rate hikes in 2023 unnecessary. Markets had been expecting at least one more hike this calendar year of 0.25%. The comments had the effect of sending the US Dollar lower and yields sharply lower and boosting the stock market.
- The war in the middle east has remained confined so far to Israel and Gaza, despite incidents on the Israel-Lebanon border yesterday resulting the deaths of both IDF and Hezbollah in small numbers. However, the war may still widen, with Israel fully mobilized after calling up 300,000 reservists. Crude Oil has been giving up some of its Monday gains over recent hours.
- Gold continued its strong rise yesterday.
- In the Forex market, there has been little directional movement during the Asian session. Trend traders in the Forex market will be most interested in being long USD/JPY and short EUR/USD as these are the two major Dollar pairs which have historically tended to trend most reliably, and both have valid long-term trends. The Israeli Shekel also weakened dramatically yesterday, with USD/ILS almost reaching the big round number at 4.00, but it is now regaining some strength.
- It may be a relatively quiet day in the markets today, as there are no high-impact economic data releases scheduled.