Minutes of the last FOMC meeting show a solid majority expects to make 2 further rate hikes of 0.25% each before the terminal rate is reached in this rate cycle.
- Equity markets are lower on deteriorating risk sentiment, with the FOMC meeting minutes released yesterday seeming to have little impact. Most global stock markets are trading lower, especially in Asia, where the Hang Seng Index is down by more than 2.5% and the Nikkei 225 Index is down by more than 1.5% on the day
- The US 10-Year treasury yield hit its highest level since March as treasuries sold off, with the inverted yield between the 2-Year and the 10-Year yields yesterday reaching its highest level for decades, which is typically a bear market signal, despite the strongly bullish stock market we have now in the USA.
- Bitcoin again closed yesterday below what seems to be a very pivotal round number at $31k, with the price action now looking more uncertain, suggesting that a bullish breakout may not be happening.
- The Japanese Yen remains the weakest major currency over the long term. Friday saw the USD/JPY currency pair make a new 7-month high above ¥145, but it is now stuck below that level as the danger of intervention from the Bank of Japan intended to drive down the rate remains. Trend traders will remain interested in being short of the Japanese Yen, which has also a reached multi-year low Friday against the Euro.
- In the Forex market, the Japanese Yen has been the strongest major currency over the Asian session, while the Euro has been the weakest. The US Dollar is continuing to rise today after rallying last week, with the Dollar Index beginning to suggest it may soon establish a new long-term bullish trend technically, but its chart pattern is still strongly suggestive of consolidation.
- OPEC will continue its round of meetings today.
- There will be a release today of a batch of US economic data, including the ADP non-farm payrolls forecast (expected at a net increase of 226k new jobs), JOLTS job openings, unemployment claims, and ISM Services PMI data.